I have talked about the Lobsters a couple of weeks ago, andI would like to continue this topic – The Wealth of Maine. Today I want to switch the topic from theocean to the land- the forest to be precise.
I was not borne as a business person, but day by day whenyou’re surrounded by a great wealth of nature, you start to think about how youcan turn this type of wealth into more liquid type of wealth – business andprofit. Interesting enough, while I wasthinking about this topic last week, Dr. Strong mentioned about the increased institutionalinterest in the timberland, and how valuable it is. “The different motivations for timberlandinvestment generally fall into one of three groups: timberland as collateral,timberland as a strategic investment, or timberland as a pure investment”. While I’m interested in investment forthe sake of being an MBA Finance student, from an international trader’s aspect,I’m more interested in export market. Trades happen when one side has sufficientsupply, and the other side has great demand. In this case, a lot of countries are not as blessed with all theseforest coverage as we do, such as China, Japan, Thailand and Middle East. Wood and its products are essential in our everydaylive, so the demand is always there.
We have the resource, (84% of Maine is covered by forest), butwe don’t use it wisely! This is onething really bothers me sometimes. I owesome timberland here in Washington, andthe sad thing about it is when you hire somebody to cut the tree, and truck itto the dealer, you’re making about $400 a truck load provided the wood is inhigher grade. Then the dealer truckslogs to the mills, sadly, most to the mills in Canada, just like lobsters. Canadian companies mill the lumbers, and shipthem to China, fold the price a few times, and then Chinese companies make furnitureand sell them back to USA. We all know that China does not have enoughlumbers for their own use because of government’s 50 years ban. Whenmy house was under construction, we had to buy lumbers from Lakeview Company,and most of their lumbers are from Canada. I just cannot explain why. In asense, this increases the job opportunities for the shipping company, but notmuch benefit to our State economy other than the purchasing tax the government collects.
My question is: why can’t we produce lumbers locally andmake products right here, and sell to other countries? I have a friend who has been in Marine shippingbusiness for many years, and she told me that they shipped at least a couple 40foot containers of logs and lumbers to China every week. Unfortunately, it’s in the West Coast, not inMaine, but my point is, it can happen here in Maine too! After Japan’s earthquake, there’s a greatdemand for wood for their reconstruction work, why can’t we be thesupplier?
Talking about Japan, another thing I want to mention here ismushrooms, the wonderful by-products from the wood. Japanese people lovemushrooms to a degree that they almost worship them. In our Maine’s wood, there grows those highpriced mushrooms – Matsutake, which can run as high as $180/lb. in Japan; andLingZhi also known as Renshi, which Chinese people would die for it. I just checked this particular species up inChinese website, and the price was outrageous, something like over $1000/ lb.,because they are used for cancer treatment. Ironically, I don’t see any those supplement pills are made in Maine inthe local health food, and a pack of 2 oz. Mutsutake is sold around $6 which isimported from Japan.
Trading is the oldest business ever existed in the humancivilization. Before the currency everinvented, people traded everything for their needs. There is a fortune of wealth in the woodright around us, and they are not like sands which people can find everywherein the world. If we sit on the mountainof gold and cry we are poor, we need to do something about it.