TECHNOLOGY ASSESSMENT IN THE STRUCTURAL WOOD PRODUCTS INDUSTRY THROUGH VALUE ADDED SIMULATION

Log conversion processes currently in use are, for the most part, batch processes based on sawing or rotary peeling of logs, leading to direct correspondence between the size and quality of the raw material and the size and quality of the resulting product. Since the engineering capabilities of such products are also dependent on their size and quality, a higher value is imputed to those logs from which these products can be made, i.e., larger logs of higher grade. In recent decades, rising price differentials between timber grades, relative to product prices, have reduced the profit margin on traditional conversion processes, contributing to the development of new technologies. Simulation was used to project the value added to different log grades when used to produce structural products through alternative conversion methods. The results obtained indicate that resource scarcity (as reflected by log prices) provides a strong impetus for the development and adoption of improvements in the methods of converting logs into structural products. Additionally, value added trends appear to provide an adequate signal of technological change. For the traditional conversion technologies of sawing and peeling, value added is projected to decrease over time for both Douglas-fir and southern pine. In general, the value added in log conversion improved as log grade declined, and the most favorable value added trends for commodity structural items were observed when these products were obtained from the lower grade logs. Technological improvements designed to increase lumber yields resulted in higher value added figures than with older technologies, but the trend lines still decreased with time. For aspen waferboard and OSB, products whose size and quality does not depend on resource size and quality, value added in manufacture was projected to increase over time. A simple sensitivity analysis to observe the effects of possible increases in raw material prices indicated that aspen pulpwood prices could rise by a significant amount and still result in an increasing value added trend for most thicknesses of waferboard and OSB panels