Lumber & Plywood Product Manufacturing
Companies in this industry engage in the sawing of dimensional lumber or make veneers, plywood, engineered wood members, or reconstituted wood products. Major companies include divisions of Georgia-Pacific, Louisiana-Pacific, Universal Forest Products, and Weyerhaeuser (all based in the US), as well as Canfor and West Fraser Timber (both of Canada), Ilim Timber (Germany), Stora Enso (Finland), and Sumitomo Forestry (Japan).
Annual worldwide sawnwood (lumber) production totals about 480 million cubic meters, and wood-based panel production is about 400 million cubic meters, according to the Food and Agriculture Organization of the United Nations. The global wood panel market is expected to see annual growth of nearly 8% through 2025, according to Grand View Research. The top lumber and plywood producing countries include Canada, China, Germany, Russia, and the US.
About 4,200 lumber and plywood product manufacturing establishments (single-location companies and units of multi-location companies) operate in the US, generating annual revenue of about $44 billion.
Demand is closely tied to the level of home construction. The profitability of individual mills depends on efficient operations, because most products are commodities. Large companies enjoy economies of scale in purchasing. Small companies can often compete successfully by focusing on a local market. Sawmills can operate with only a modest investment of capital, but plywood mills require expensive equipment and therefore are usually plants with high annual volume.
The plywood, veneer, and engineered wood product segment of the industry is concentrated: the 50 largest companies generate about 70% of revenue. The sawmill segment is fragmented: the 50 largest companies generate about 50% of revenue.
US trade in lumber is substantial due in part to the close proximity of the large timberlands in Canada. Disputes between the US and Canada about import quotas or tariffs are frequent. Although transportation costs for Canadian lumber are high, stumpage costs are generally lower than in the US. US exports of lumber and wood products are small.
Products, Operations & Technology
Sawmills 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,
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms