Lumber & Plywood Product Manufacturing Industry Profile

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.

COMPETITIVE LANDSCAPE

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 ...