Dan Meyer Northern Editor September 6, 2006

1. Trends in Global Markets for North American Hardwoods Dan Meyer Northern Editor September 6, 2006

2. Overview • Macro Trends • Europe • Sleep-Inducing Graphs • Key Opportunities • Market Summary • Asia • Canada/Mexico • Others to Watch?

3. $1,180 $1,160 $1,137 $1,108 $1,059/MBF U.S. Lumber Exports

4. U.S. Lumber Exports

5. EU Mfg. on the Move…Again

6. EU

7. EU

8. Spain

9. Italy

10. UK Germany

11. Annual Look

12. Markets to Avoid

13. Medium and Growing in EU

14. Medium and Growing in EU

15. Small But Growing in EU

16. Key European Opportunities: Poland • Rapid growth since joining EU • Tariff reductions, free trade stance, investment in mfg. sectors, wage rates among lowest on continent—make it a low-cost mfg.centerfor Europe.

17. Key European Opportunities: Poland • Increased lumber shipments to Germany ending up in Poland. • Sizeable furniture industry and rapidly growing flooring industry—both heavily export oriented. • Polish wood furniture exports up 24% in 2005 to U.S.$1.44 billion.

18. Key European Opportunities: Poland • Poland’s mfg. competitiveness similar to Spain and Portugal’s positions at initial EU formation. • Poland’s industrial production growing at 10% annually. • N.A. lumber exports will increase significantly.

19. Key European Opportunities: Turkey • EU membership discussions opened in Oct 2005

20. Key European Opportunities: Turkey • Market potential similar to Poland’s; but won’t be realized as quickly. • Wood household furniture exports surged 54% in 2004 to $136 mil. • EU admission likely; maybe as soon as 2007.

21. Key European Opportunities: Turkey • Turkey’s geographic location at the crossroads of European, Asian and African trade routes. • Attractive location from which to source lumber and mfr. products for export to all three continents.

22. European Winners

23. European Losers

24. European Summary • N.A. lumber demand slid south; now shifting east. • We’ll see more lumber shipped to Poland via Germany. • Turkey shows Poland-like promise.

25. European Summary • Exports to France, Belgium will decline further. • Short-term outlook for many other EU-15 countries is good, but long-term pressures will limit sustained market strength.

26. ASIA

27. China

28. China

29. China

30. China

31. Other Asian Markets

32. Key Asian Opportunities: Vietnam

33. Key Asian Opportunities: Vietnam

34. Key Asian Opportunities: Vietnam

35. Asian Winners

36. Asian Winners (excluding China)

37. Asian Losers

38. Asian Summary • China 8x larger than next largest Asian market. • Price will remain buyers’ main concern • Fickle • Some say too difficult to deal with

39. Asian Summary • Japan will show steady economic improvement, and increased consumer spending and business investment. • Direct lumber shipments won’t improve

40. Asian Summary • Taiwan is fading • Modest growth in Hickory, Alder • Thailand is stagnant • Walnut up in 2006 • Korea is flat • Some promise for increased Ash

41. Asian Summary • Vietnam is market to watch • Yellow Poplar • Cherry • Ash • White Oak

42. North America

43. Canada

44. Canada

45. Canada

46. Mexico

47. Mexico

48. North American Winners

49. Key North American Losers

50. North American Summary Growth Potential for 2006