Value-added Forest Products: Opportunities for Growth

Niels DeHoop, Michael Dunn, Todd Shupe, Ramsay Smith, Richard Vlosky and Qinglin Wu

Solid wood forest products as opposed to pulp and paper products can be characterized broadly as primary or secondary. This classification is not always clear, but most industry observers agree that primary products are those produced directly from raw timber input. Examples include chips, lumber, veneer, plywood and their byproducts. Secondary products use primary products as input for remanufacturing. Examples include various types of panels or engineered composites. Secondary products also can include final consumer products such as cabinets and furniture.

Value-added wood products are most commonly thought of as being only those products with the highest value such as furniture, flooring or specialized paneling. Value, however, can be added to wood and wood products at various levels of processing. For example, value can be added to a log by properly cutting to the correct length so more product can be produced from straighter, less tapered material. Value can be added to lumber by processing more efficiently or manufacturing for special niche markets. In panel production, value can be added by enhancing certain properties such as dimensional stability or resistance to termites and decay. Value is greatly added when producing engineered wood products, such as building joists, beams and framing made from wood fibers or strands held together with a binder such as glue or resin.

The LSU AgCenter Louisiana Forest Products Laboratory works to help Louisiana’s forest products industries add value to their products through a number of activities. These include enhancing production efficiency in the primary and secondary processing industries, developing more durable wood-based products, developing methods and products for recycling wood-based products and enhancing economic development by encouraging better business practices.

The potential of the value-added forest products industry has been increasing as a means of facilitating economic development. Most industry development efforts focus on value-added secondary processing (furniture, flooring) instead of primary production (lumber, plywood) to retain and expand jobs in rural areas. Value-added secondary wood processing offers opportunities for increased profitability through higher margins and greater profits. Making secondary wood products often offers opportunities that primary processing does not normally offer. For example, secondary manufacturers can generally increase prices to make up for lost profits when raw material costs rise. Secondary products also earn higher profits by adding value and meeting specific customer needs.

Louisiana’s Forest Products Industry

The harvest of timber, Louisiana’s No. 1 agricultural crop both in gross income and value-added processing, supports a solid wood forest products industry that includes about 200 primary and 750 secondary manufacturing establishments. In contrast to primary companies, secondary wood products manufacturers tend to be small; nearly two-thirds have fewer than 10 employees. More than half have annual sales of less than $250,000 with just over 5 percent having sales of $5 million or more. Average annual sales are an estimated $1.2 million.

Louisiana produces only 97 cents of value-added product for every $1 of lumber created by the sawmills operating in the state. This compares to the southern average of $2.13 of value-added for $1 of sawmill product produced. Improvement of industry competitiveness can increase potential for jobs creation and resource use in the rural-based forest products industry. However, to attain this potential, a wide variety of issues must be addressed. For example existing consumer market trends, location decision criteria, raw materials availability and applicability, labor force skills and training requirements, target market identification, recruitment and retention strategies, comparative advantages and effects on community stability should all be considered as part of an economic development initiative.

LSU AgCenter research has shown that if Louisiana could reach the Southern average of wood value-added production, about 5,500 jobs would be created. Recent research has indicated that the main barrier to secondary wood products expansion in Louisiana is the lack of an adequately trained work force. To help the industry attain its full potential, a wide variety of wood science and business issues are being addressed.

Educational Activities

The first step in adding value to wood is to identify the species of wood correctly. Drying schedules and end-use options of wood are largely governed by the species. The Louisiana Forest Products Laboratory conducts wood identification workshops. Fundamental in adding value to wood is kiln drying. Accordingly, lumber drying workshops are conducted in cooperation with LSU School of Renewable Natural Resources, Louisiana Tech University, Louisiana Forestry Association and dry kiln manufacturers. In addition, newsletters and publications include information on wood-moisture relationships such as lumber drying and wood decay. The Forest Products Lab also educates wood business owners on sound business practices such as record keeping and marketing. Evaluations indicate that more than half of the participants plan business expansions by adding employees and equipment and expanding facilities.

In addition, workshops are conducted to educate individuals working in the Louisiana secondary wood industry as well as those considering entering this industry sector. The wood science issues that have been targeted include wood-moisture relationships, wood identification, lumber drying and storage and wood preservation. Business issues are critical to the success of a secondary wood business, and workshops have targeted sound business practices, marketing, regulatory compliance, workers’ compensatory insurance, business plans, obtaining a loan and Internet resources. Workshop evaluations indicate that participants have earned or saved their businesses about $1,000. Moreover, more than half of the participants say they plan to add at least one employee.

Termite-resistant Products

One opportunity for value-added growth in Louisiana’s forest products industry is the development of more durable termite- and decay-resistant engineered wood products. The damage to homes and forests caused by Formosan subterranean termites and resulting treatments and repairs is estimated at $2 billion a year nationwide, with $350 million or more of that in New Orleans. Moisture and decay cause additional losses. A major issue is the availability of treated engineered wood products for use in adverse environments. Various treatments are becoming available, but there is a need to develop stronger, more stable, more resistant, but environmentally safe wood-based treated products. Once proven, these products will have great demand in the residential and commercial construction markets.

The Louisiana Forest Products Laboratory is working with a number
of companies to help develop durable wood-based materials. A Formosan subterranean termite lab has tested more than 70 treatments. In addition, products are being developed and tested for better moisture resistance, dimensional stability, strength and product performance. Specifically, research is being conducted on structural composite panels such as oriented strandboard (OSB), which cannot be pressure-treated once it is made into panel form. OSB is made of wood flakes glued with a thermal-setting resin. It is widely used as sheathing, flooring and I-joist materials in construction, replacing more traditional plywood. Thus, alter-native techniques for protecting OSB against termites are being developed.

As durable wood-based materials are developed, homeowners and homebuilders who incorporate them into new homes and repairs of older homes can have more confidence that their investments will last. Through these efforts, significant new value-added markets can be developed that will enhance the industry supplying these markets and provide Louisiana home-owners reduced maintenance costs and a significant reduction in termite damage.

Agriculture-fiber Composites

Sugarcane is an important agricultural crop in the southern United States. The cane stalk consists of an inner pith that contains most of the sucrose and an outer rind with lignocellulosic fibers. Cane processing crushes the entire stalk to extract the sucrose, from which refined sugar is produced. Large quantities of the bagasse, containing both crushed rind and pith fibers, remain after sugar extraction. Disposal of this byproduct from the sugar industry is so far still inefficient. For instance, about 85 percent of the bagasse produced in Louisiana is used as fuel in mill processes and for other low-value applications such as mulch and inexpensive ceiling tiles. The remaining 15 percent is waste that is allowed to decay or is put in landfills. Therefore, finding better ways to use bagasse is an important research interest with practical significance.

Transforming bagasse into high quality industrial panel products provides a prospective solution. Research has been conducted to develop bagasse-based core material for laminate floors. Hammer-milled bagasse fibers were successfully combined with polymeric diphenylmethane di-isocyanate resin to form panels at various densities. Performance characteristics of the products were assessed and compared with respective properties specified in the industrial standard for commercial wood-based particleboard. The results of this study demonstrated that a consistent, high performance agrifiber composite panel with desirable environmental attributes could be developed successfully.

Making Sawdust into Firelogs

A perpetual problem for the wood products industry has been the disposal of wood residues. Common methods of disposal include sending to a landfill or burning for energy. The sawmills and plywood mills in Louisiana use sawdust and wood pieces for particleboard and energy. The smaller secondary industries such as cabinet and furniture manufacturers cannot efficiently do this.

LSU AgCenter researchers have developed a way to create firelogs from sawdust and planer shavings. This turns a waste material into a profitable resource for homeowners without the mess and work of firewood. Conventional firelogs are made from sawdust and petroleum-based paraffin wax. The firelogs created in the Louisiana Forest Products Lab consist of sawdust and a wax made from soybeans. Dubbed an environmentally friendly firelog, it not only smells better as it burns, but is less polluting. Tests indicate that the firelogs produced less carbon monoxide and total hydrocarbons than either oak firewood or conventional firelogs. Researchers are now looking for ways to resolve economic issues to help bring the product to market.

Markets and Business Development

In addition to developing value-added products, it is important to identify where the markets are for the products. More than 20 studies have been conducted by the Louisiana Forest Products Laboratory that offer information for Louisiana wood product manufacturers on baseline market structures, product opportunities and the competitive environment.

Although Louisiana ranks low in adding value to its wood product resources and in other productivity indicators when compared to neighboring states with similar resources and industry structures, the value-added wood products industry in the state has significant potential for expansion and development.

Niels DeHoop, Associate Professor; Michael Dunn, Program Leader, Extension Natural Resources; Todd Shupe, Associate Professor; Ramsay Smith, Program Leader, Forest Products; Richard Vlosky, Professor; and Qinglin Wu, Associate Professor, School of Renewable Natural Resources, LSU AgCenter, Baton Rouge, La.

5/6/2005 6:42:03 PM
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