Wood Product Manufacturing
Description
Companies in this industry manufacture dimensional lumber; veneers, plywood, engineered wood members, or reconstituted wood products; wood windows and doors, wood flooring, or other millwork; wood containers; pallets; prefabricated wood buildings; or manufactured homes. Major companies include Andersen Corporation, Cavco, and Weyerhaeuser (all based in the US), as well as Sekisui House (Japan), Stora Enso (Finland), Svenska Cellulosa (Sweden), and West Fraser Timber (Canada).
The estimated total value of the world's forests is as much as $150 trillion-nearly double the value of global stock markets, according to Boston Consulting Group (BCG). Russia, Brazil, Canada, the US, and China accounted for more than 50% of the global forest area.
The US wood product manufacturing industry includes about 15,000 companies with combined annual revenue of about $110 billion.
COMPETITIVE LANDSCAPE
Demand is closely tied to the level of home construction. The profitability of individual companies depends on efficient operations, because many products are commodities. Large companies enjoy economies of scale in purchasing. Small companies can often compete successfully by focusing on a local market.
Overall, the US industry is fragmented: the top 50 companies account for about 40% of industry revenue. However, some segments of the industry are concentrated, including plywood and veneers, wood windows and doors, and manufactured housing.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include wood sheathing products (about 25% of industry revenue), softwood dressed 2-inch lumber (more than 20%), and wood pallets and pallet containers (more than 20%). Other products and services include hardwood rough lumber (about 15%) and construction of manufactured (mobile) homes (about 10%).
Lumber producers operate sawmills that process raw logs in a few simple operating steps. Logs are debarked and cut into "cants" that are further cut into finished pieces of lumber, using either circle saws or bandmills. Once lumber is cut to size, it may be sold as "green" lumber or may be stacked and dried to a specific moisture content through air- or kiln-drying.
Plywood mills are more complex than sawmills. Raw logs are processed to produce a continuous layer of wood called a veneer. Sheets of veneer are then sprayed with glue, stacked on top of each other with the grain of the wood in alternating directions, and sandwiched in a hot-press that forces the pieces together and cures the glue. The ends are then trimmed and the product may be sanded. Oriented strandboard (OSB) is manufactured similarly. Debarked logs are fed into a waferizer, where they're sliced into thin strands. The strands are dried, mixed with resin and other additives in large blenders, and formed into mats on trays or moving belts. Several layers are laid down, with the wood strands in alternating orientation, and the mats are rolled and cured in a hot-press. Other types of panels, including particleboard, hardboard, and medium density fiberboard (MDF), are made from wood residues like sawdust, shavings, and chips that are ground, dried, mixed with resin, and hot-pressed. Engineered wood products are produced from lumber that is dried, glued, and hot-pressed to create beams with greater structural strength than dimension lumber.
Major operations in wood door and window manufacturing are cutting, machining, and assembly. Door frames and window sashes or frames are made of various wood components that are cut to size, then assembled using woodworking joinery techniques including cope and stick, doweling, or mortise and tenon. In the case of windows, glass is cut to size and installed into the wood frame or sash. Wood flooring is milled from hardwoods, principally oak but also maple, ash, beech, birch, pecan, walnut, hickory, and others. The production process involves drying boards of wood in kilns to reduce the wood's moisture content. Pieces are then cut from boards and the sides milled to produce the tongue and groove. Because of the simple nature of the wood flooring and other millwork manufacturing process, most production is highly automated.
Wood pallets and containers include pallets used in material handling of durable and non-durable goods, as well as wood containers such as boxes, barrels, baskets, cases, and crates. Manufacturing of wood pallets and containers involves simple carpentry and assembly techniques, and can be labor-intensive.
Manufactured housing (MH) companies produce single- or double-wide rectangular housing or nonresidential units, which are later installed on a site to form a dwelling or building, such as a classroom or office. MH is built on assembly lines in factories, generally using the same materials as for a site-built house. Units are built on a permanent steel chassis that allows the finished unit to be transported to the installation site, where it is placed on a foundation (most often concrete blocks), and secured with tie down straps. Some units are placed on permanent masonry foundations.
The estimated total value of the world's forests is as much as $150 trillion-nearly double the value of global stock markets, according to Boston Consulting Group (BCG). Russia, Brazil, Canada, the US, and China accounted for more than 50% of the global forest area.
The US wood product manufacturing industry includes about 15,000 companies with combined annual revenue of about $110 billion.
COMPETITIVE LANDSCAPE
Demand is closely tied to the level of home construction. The profitability of individual companies depends on efficient operations, because many products are commodities. Large companies enjoy economies of scale in purchasing. Small companies can often compete successfully by focusing on a local market.
Overall, the US industry is fragmented: the top 50 companies account for about 40% of industry revenue. However, some segments of the industry are concentrated, including plywood and veneers, wood windows and doors, and manufactured housing.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include wood sheathing products (about 25% of industry revenue), softwood dressed 2-inch lumber (more than 20%), and wood pallets and pallet containers (more than 20%). Other products and services include hardwood rough lumber (about 15%) and construction of manufactured (mobile) homes (about 10%).
Lumber producers operate sawmills that process raw logs in a few simple operating steps. Logs are debarked and cut into "cants" that are further cut into finished pieces of lumber, using either circle saws or bandmills. Once lumber is cut to size, it may be sold as "green" lumber or may be stacked and dried to a specific moisture content through air- or kiln-drying.
Plywood mills are more complex than sawmills. Raw logs are processed to produce a continuous layer of wood called a veneer. Sheets of veneer are then sprayed with glue, stacked on top of each other with the grain of the wood in alternating directions, and sandwiched in a hot-press that forces the pieces together and cures the glue. The ends are then trimmed and the product may be sanded. Oriented strandboard (OSB) is manufactured similarly. Debarked logs are fed into a waferizer, where they're sliced into thin strands. The strands are dried, mixed with resin and other additives in large blenders, and formed into mats on trays or moving belts. Several layers are laid down, with the wood strands in alternating orientation, and the mats are rolled and cured in a hot-press. Other types of panels, including particleboard, hardboard, and medium density fiberboard (MDF), are made from wood residues like sawdust, shavings, and chips that are ground, dried, mixed with resin, and hot-pressed. Engineered wood products are produced from lumber that is dried, glued, and hot-pressed to create beams with greater structural strength than dimension lumber.
Major operations in wood door and window manufacturing are cutting, machining, and assembly. Door frames and window sashes or frames are made of various wood components that are cut to size, then assembled using woodworking joinery techniques including cope and stick, doweling, or mortise and tenon. In the case of windows, glass is cut to size and installed into the wood frame or sash. Wood flooring is milled from hardwoods, principally oak but also maple, ash, beech, birch, pecan, walnut, hickory, and others. The production process involves drying boards of wood in kilns to reduce the wood's moisture content. Pieces are then cut from boards and the sides milled to produce the tongue and groove. Because of the simple nature of the wood flooring and other millwork manufacturing process, most production is highly automated.
Wood pallets and containers include pallets used in material handling of durable and non-durable goods, as well as wood containers such as boxes, barrels, baskets, cases, and crates. Manufacturing of wood pallets and containers involves simple carpentry and assembly techniques, and can be labor-intensive.
Manufactured housing (MH) companies produce single- or double-wide rectangular housing or nonresidential units, which are later installed on a site to form a dwelling or building, such as a classroom or office. MH is built on assembly lines in factories, generally using the same materials as for a site-built house. Units are built on a permanent steel chassis that allows the finished unit to be transported to the installation site, where it is placed on a foundation (most often concrete blocks), and secured with tie down straps. Some units are placed on permanent masonry foundations.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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