Companies in this industry own timberlands and grow and harvest timber on production cycles of 10 years or more, primarily for use as lumber. Major companies include US-based Potlatch, Rayonier, and Weyerhaeuser, as well as Resolute Forest Products (Canada), Stora Enso (Finland), and Svenska Cellulosa (Sweden).
Demand for timber used to make lumber is driven primarily by residential construction activity. The profitability of individual companies depends on efficient operations. Large logging companies can have a cost advantage over smaller ones through the use of more efficient (and more expensive) machinery, but logging is a very local activity, often without significant economies of scale.
PRODUCTS, OPERATIONS & TECHNOLOGY
The US contains more than 750 million acres of forest land, including about 500 million acres of timberlands. Timberlands in the South contain softwoods like loblolly-shortleaf pines and longleaf-slash pines. Timberlands in the West contain mainly Douglas-fir, fir-spruce, and ponderosa pine. Hardwood timberlands are located mainly in the East and contain mainly oak-hickory or maple-beech-birch. The timber inventory on a piece of land is measured in terms of "cunits" - 100 cubic feet of solid wood.