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Cypress Creek Hardwoods

China imported $740 million in raw, un-cut timber from the United States in 2012. However, China is not the easiest market for U.S. companies seeking to supply China with U.S. timber. It is even more daunting for new exporters and even more so if the novice exporter’s main business had little to do with forestry products. Despite these odds, Austin, Texas based Cypress Creek Hardwoods successfully established a customer base in China and is receiving on-going orders from Chinese wood distributors and fabricators.

Doug Smith, Assitant Director of the International Trade Center, helped Cypress Creek Hardwook when they begin their process to export to China with market research and planning before any Chinese buyers were approached. Cypress combined trade infomation provided by Mr. Smith with Chinese industry information provided by the U.S. Hardwood Exporters Association. The business model they discovered was to buy kiln-dried hardwood from small, non-exporting timber mills and to sell directly to small Chinese furniture and cabinet manufacturers in China.

With suppliers in place, the initial visit to China proved the target market to be wrong because small Chinese companies did not have the capability and skills to directly import. Mark was quickly able to identify the right buyers and received his first order shortly after returning to Austin. Today, after four visits to China and 50,000 miles of driving to visit suppliers, Cypress Creek Hardwoods has a small set of regular Chinese customers. Longer term, Mark also sees considerable potential expanding into additional markets in Southeast Asia.

Cypress has proven adept at overcoming problems along the way, including trade financing and logistical issues. Success to date is the result of quickly recognizing potential barriers and adapting to the new circumstances. Recovery of the U.S. housing market has made it harder to find high quality timber at a price acceptable to Chinese customers. However, the company has been successful in finding medium-size suppliers interested in working with Cypress Creek long-term.

The International Trade Center has worked with Cypress from the start by providing some initial training on export finance and payment methods and logistics, introducing Cypress to U.S. Export Credit Insurance, and providing on-going market intelligence trade data.

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