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Business North - The Daily Briefing - Business Newspaper Online
Forest products may have bright future after all
During the last decade, the forest products industry has suffered more than its fair share of economic woes.
The list of regional closures in the recent years is long and the job losses have been numerous. In the last decade alone, this region has witnessed: Ainsworth shuttering three oriented strand board facilities, Blandin Paper Co. permanently closing two paper machines, Verso shuttering its paper mill in Sartell, Georgia Pacific closing its Duluth hardboard plant and most recently, Boise announcing a major downsizing that pares 265 jobs in International Falls.
Yet, despite the grim reality, there are those who believe that forest products industries are not only viable; they may even have a bright future.
That’s the message that President Jeff Howe and Executive Director Katie Fernholz of nonprofit Dovetail Partners Inc. delivered to the Grand Rapids Area Chamber of Commerce at its monthly luncheon on Monday.
The Minneapolis-based nonprofit think tank is dedicated to “developing creative solutions to topical strategic issues critical to the natural resources sector.”
Part of the reality for the forest products industries, said Howe, is that the issues facing the Northern and Southern Hemispheres are dramatically different. Deforestation, a significant problem in Africa and South America, isn’t occurring in Europe and North America, where the number of trees produced has exceeded the number harvested since the 1930s.
North America has and will continue to play a globally dominant role in the forest products industries, added Fernholz. “We have incredible capacity to grow trees,” she said.
Directly and indirectly, forest products industries contribute $17.1 billion to the state’s economy and employ 86,775, according to a 2011 report from the University of Minnesota Labovitz School of Business and Economics.
But, there’s little doubt that those numbers have been shrinking. Since 2003, the state has gone from six OSB mills to two and from five pulp and paper mills to four. Howe, however, is unconvinced that best days of the forest products industries are in the past.
He cited a number of developments and realities that his group asserts will drive the future. Among them:
• The use of wood in tall buildings. Once only seen as a suitable building material for structures under four stories, research has uncovered ways to utilize wood in taller structures, making for a lightweight, easily constructed structures.
• Nanocellulose. It’s a “stronger than Kevlar” plastic-like material made from wood pulp.
• Biomass energy. The production and sales of wood pellets as a source of heating fuel will be a future driver in forest products, said Howe. Already, ports in the southern United States are being revamped, to maximize the possibility of exports to Europe.
• Thermally treated wood. Treating wood in a heated, oxygen-starved environment fundamentally changes its properties, increasing its durability, weather resistance and stability. “It allows wood to compete with virtually any other product,” said Howe.
• CLT (cross-laminated timbers) Described by the American Wood Council as: “a flexible building system suitable for use in all assembly types (e.g., walls, floors and roofs). Made from industrial dried lumber stacked together at right angles and glued over their entire surface, it is an exceptionally strong product that retains its static strength and shape, and allows the transfer of loads on all sides.” CLT could potentially be used instead of steel or cement in construction.
• The Lacey Act Amendments. In 2008, a century old act was given new life and teeth. The act now provides significant penalty to companies that use illegally obtained wood – even as “innocent owners.”
• Millenials. The largest generation in the history of the United States is coming of age and will soon be the nation’s driving consumer force. Furniture giant, IKEA, has already aimed much of its efforts toward catering to this demographic.
“There are some really interesting changes coming and some really exciting trends,” concluded Howe. For more information, visit, dovetailinc.org.
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