Basswood has a long history of use in the pencil indusry
Ecoslat® Basswood brand pencils utilize an alternate species, Chinese Basswood (also known commonly as Linden) which grows in the temperate forest zone in Northeast China and the Russian Far East. Usually, available as two species of the genus Tilia, Basswood has been the favored “species” for the production of wood-cased pencils in China for approximately 100 years. Various species of Japanese Basswood were used for making pencils in Japan in the early 20th century as well. Similarly, Linden has a history of utilization in the pencil industry in Eastern Europe. Basswood is also regularly used in production of plywood, furniture and window blinds which present alternative competition for various Tilia species to the pencil industry. American Basswood is little used for pencils, but has been common in window blind and certain plywood and furniture uses in the U.S. In general, Basswood has some good technical properties for pencil manufacturing, though with greater density and certain grain characteristics do not typically machine as smoothly in traditional pencil manufacturing equipment or finish as well as pencils produced from “Genuine Incense Cedar”®.
California Cedar Products Company began exploration and testing of Chinese Basswood supply in the early 1990s and has been offering its Ecoslat® Basswood product range since the late 1990s prior to initiating production in our Tianjin, China facility (TCW) in 2001. From 1996 to 2000 our TCW subsidiary operation produced window slats from Chinese Basswood for export to the US market, thus our supply relationships with Chinese Basswood suppliers are extensive and the company is well respected as a reliable and consistent trading partner longer than any other foreign owned participant in the Chinese slat industry.
Rapid economic development of the Chinese Pencil & Pencil Slat Industry as well as growing wood products demand for Basswood in alternative uses over the past two decades has resulted in significant structural change in the Chinese slat and pencil supply chain.
All forests in China are managed and controlled by government entities referred to as Forest Bureaus (FBs). These forest bureaus control and manage the annual harvests of all species within designated geographic areas and under harvest guidelines and regulations established by the Chinese central government. Historically, a large proportion of logs harvested of all species were consolidated and produced into variety of lumber products at a large integrated forest bureau processing facility. Similarly, the pencil industry in China twenty years ago consisted of large state-owned enterprises with vertical integration from slat production through to finished pencils, generally purchasing Basswood logs sorted for pencil production from the Forest Bureaus. Some FBs produced slats and sold to pencil manufacturers (see discussion of slat slicing process here). Historically, very few Chinese produced slats were exported and almost all were consumed in domestic production of pencils. Given increasing movement towards market economy conditions there has been tremendous growth of private enterprises involved in producing slats, pencils and other wood products in China. This has resulted in a more efficient, but more diverse and complex supply chain including more Chinese slat production specialists and exporters who have followed CalCedar’s leadership in developing the Chinese export slat market over the past ten years.
During this period there have been increasingly stringent harvest restrictions implemented by the Chinese government and implemented by the FBs. Overall, Chinese harvest restrictions in the last several 5-Year Management plans have resulted in a net harvest reduction targets of 40+% since the year 2000. As a result the growing demand for Chinese pencil production and other industry uses has resulted in increasing cross-border trade with the Russian Far East Basswood resource region over the past 10 or more years. Given the more challenging environment in this region of Russia for consistent and reliable enforcement and documentation of existing timber harvest laws and regulations, there has been increasing concern as to the sustainability and legality of Basswood and other species of timber in the Russia-China cross border trade. Also there have been new log and lumber export duty issues from Russia that impact this trade. As a result CalCedar has worked to implement stringent controls in our overall supply chain including implementing both FSC and Lacey Act compliant product lines to differentiate our supply chain from less discerning competitors in the slat and pencil industry.
All these trends are also leading to increasing cost of Basswood supply to most of the industry. However, some of the lowest cost slat producers in China continue sourcing via Russia in a manner that skirts the regulatory environment resulting in increased risk to downstream pencil manufacturing customers who focus only on buying the cheapest slats and solely rely on the word of their suppliers without seeking further supply chain documentation and due diligence. Ultimately, these factors increase the long term risk of the entire Basswood supply chain and are a major reason for CalCedar’s introduction of our new Ecoslat® Pacific Albus®product line. Similarly, other Chinese competitors have focused on diversifying into other lower cost poplar and tulip woods sourced in the same regions, which do not offer the same technical performance of Basswood, but also may share some of the same regulatory risks as their Basswood supply. CalCedar remains committed to supply Basswood products to our customers who are prepared to pay a fair market price for slats that can be reliably supplied from forests that comply with all national and local harvesting laws and regulations. We will not compromise our values merely to meet the market’s demand for low prices.
CalCedar®, Ecoslat® and the “Geniune Incense Cedar”® mark are registered trademark and trade dress of California Cedar Products Company. The Pacific Albus® trademark is licensed exclusively to California Cedar Products Company for use related to production and marketing of slats and wood raw materials to the global pencil industry. California Cedar Products Company is the exclusive producer of Ecoslat® Pacific Albus® pencil slats and distributor to the pencil industry of Pacific Albus® raw material.
