Cost cutting measures and industry efforts to diversify away from the US housing market are allowing the wood products sector to post impressive numbers. Forest plantation operators in China are struggling to keep up with surging demand, allowing North American wood producers to boost exports to the emerging market. Wood Resource Quarterly says that China is driving demand for lumber, with Chinese imports rising to 9.4 million cubic meters in 2010 from just over 2 million in 2006. The growth continued in the first two months of this year as Chinese demand jumped 32 percent from the first two months of 2010. Forestry experts believe there is a significant supply gap between China’s forest resources and its industry demand. Analysts argue Chinese lumber imports are expected to double over the next five years to 12 billion board feet. Louisiana-Pacific Corporation CEO Rick Frost expects the amount of wood in new Chinese homes to rise to 8% from 2%. The lumber producer has said that it may pursue a 10-fold rise in exports to China after a recovery in American homebuilding failed to materialize. Sino-Forest is one of China’s largest forestry plantation operators. The company says that it is “uniquely positioned to reap value from China’s vast wood product market potential.” Sino-Forest says its primary goal is to increase its wood fibre output to 17 million cubic meters this year, and plans to spend about $1.9 billion to buy plantations, plant trees and perform maintenance. (MARKETWIRE)