Replies

1. 
   jonsherryl | Jul 04, 2003 06:46pm | #1

   Carlos, I think Certification is a very suspect benefit, but I don't want to kick off another debate on that subject.

   More importantly, I think the co-operative aspects of communities coming together in the tropics to make the most of their resourses is the more valid objective of your efforts. Saw logs are a basic commodity in the international market and to hope for establishing a point-of-difference based on the fact that yours have been blessed by the wonders of modern forestry practice doesn't make them superior. IF these practices even prove out, it only means that you will be able to perpetuate your source of supply and will be in business when your competitors are gone. Your source will no longer be a genuine rain forest, but at least it will be producing (hopefully) some of the species your are attempting to husband.

   As for a recommendation, I think the wise approach is to concentrate on value added options. In other words, attempt to expand vertically away from the basic commodity of saw logs. As every farmer knows, the profit isn't in growing the stuff as much as it is in the  processing of the commodity toward its end-use form. Find out what your customers are doing with the logs you sell them and see if you can further process your resource before you pass title on to someone else. How much infrastructure would you have to put in place to Kiln dry it into lumber, make veneers, plywood, turnings etc? The more refined your product is when it leaves your control, the lower the shipping costs, the closer you come to dealing with your ultimate end-user, the more you maintain control of your market...and the higher your margins.

   
   

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   Edited 7/4/2003 12:02:32 PM ET by Jon Arno

2. 
   StanleyNiemiec | Jul 06, 2003 01:21am | #2

   It is with some surprise that I agree to a point with Jon although I think his approach to the value-added concept a bit theorethical and simplistic at least within the context of my experience of wood product development and economic diversification.  There is a tremendous amount of hard work that is necessary to get from the theory to final viable solutions especially considering the fact that greater than 50% of "new" wood product ventures are unsuccessful.

   On the value of certified FP, that is an issue that depends entirely on the purchaser of those items.  It is less valuable if you are selling your "product" to industrial customers.  For other products it may be only of marginal importance and it simply may be a reason to chose your product over that of a competitor given that the two products are of equal price (competitive advantage).  There are less products/markets that will actually reward a certified product manufacturer for this extra effort.  This is the reality and it is my belief that the certification process has been oversold by the certifying associations.  However, it is a very wise practice to insure that your forest resources are dedicated to sustainable practices to insure that this assets are available for the future generations of your community as well as a way to protect ecosystems and watersheds.

   While I was employed by the Forest Products Department at Oregon State University, I spent a lot of time on the issue of wood product development.  Environmental restrictions dramatically reduced the supply of timber for federal lands (the spotted owl crisis) that basically resulted in the loss of 30,000 jobs in the state of Oregon.

   It was my approach that product development strategies and methodologies be applied at both community and business/entrepreneurial levels to develop/select marketable products based on the properties of the available woods, the skills of the workforce, the available capital (both money and equipment) and extant market opportunites.  It is my belief that there is a correlation between product development, business development, community development and economic development thought I have never found any economic theory or writings that discuss it.  I felt that too many individuals were opting for product selection/development appoaches that were very risky and did not apply product development thinking and methodologies that would minimize those risks especially as by good thinking/research, it would be possible to identify those extremely risky products that were likely not to be successful.

   In any event, most individuals either did not care about the fact that 30,000 people were out of work or they were searching for simplistic solutions (ie a magic wand or a silver bullet) such that, amongst the powers that be, my work was deemed to difficult or too radical.

   The reality is that there are literally millions of extant wood products being marketed so there is great opportunities available.  That's the good news!  The bad news is that the current producers of these millions of wood products have a competitive advantage that you need to overcome.  And you will somehow have to veritcally intigrate the processing capacity of your local industries to accomodate this as well as insuring that you have a skilled workforce to produce these items.  Thus the selection/development of the products you decide upon is absolutely critical to your success or failure.

   If I can be of assistance, please contact me at [email protected]

   Stanley Niemiec  --  Wood Technologist

1. 
   Adrian | Jul 06, 2003 07:44pm | #3

   I can't comment specifically on the particular situation here; don't know enough about the types of wood in the region, industrial capacity, labourforce, markets etc. I can say I agree with Jon that , whatever you do, at the foundation of everything you do must be the dermination to add as much value as possible where you are, and you have to understand that the secondary or value-added wood products industry is tiered; the higher the tier (appearance grade products, furniture, millwork, etc), the more value is added, and the more benefit to the producers all around. Lower tier items like charcoal or wood chips (thinking of my region now) return very little comparitively. Everyone, everywhere is asking the same questions ('how do we grow our wood products industry?'), and the answers are very specific to the characteristics of your region. I'm in the final stages of administering a project to develop a sector export strategy for wood manufacturing in my province; the consultant we hired is doing similar work all around the world. We zoomed in on one fairly small province for this work....the results will be integrated into a regional strategy (four provinces), but you have to focus smaller than that initially to get the answers. I know USAID has funded a lot of work on wood products in Mexico, maybe you can tap in to that.

   As far as certified wood goes, I'll just make a couple of comments. The study I just mentioned recommends a strong push to implement those types of certifications, and a lot of marketing the benefits of it also (and I'm not going to get into pros and cons now; just that we were told to go with the 'green' approach). Definitely, if your market includes Europe at all, you have no choice, as they will be mandating it, same with Home Depot, Lowes etc.,....if your forests are already certified, then that may prove to be a big competitive advantage if products made from non-certified wood are frozen out. People may not agree with the trend, but I don't it stopping or even slowing.

   In the trenches, you can get a different view of certified wood, and the issues around it (this is pretty much unrelated to the original question). I was at a chapter meeting recently for an architectural woodworking organisation , and the subject came up. I had already been contacted by one company in the group for more info on this, because they are seeing it in more and more tenders ('must use certified wood' etc.) in both Canada and the U.S. Another manufacturing member and a lumber distributor member told us about their experience on a project (they had worked together on it). It required certified wood, and they were eventually able to source it....but it was difficult, time consuming, and expensive to do so. Inspectors had to come to the plant to check (another expense), and what the powers that be wanted was, if certified wood was going to be used on a shift, then only certified wood would be used on that shift. Most shops are running five, six, or ten different jobs at the same time, and only one required certified wood.....so the choice was, use (expensive) certified wood on all the jobs, or only work on the one job that required the certified wood. Neither is feasible for most of us at this point. Bottom line is, both the manufacturer and the distributor felt it was better to just say no to any future projects involving certified wood. Manufacturing may be a different situation, but in job-based shops like cabinets and millwork, there are problems.cabinetmaker/college woodworking instructor. Cape Breton, N.S