INDUSTRY PROFILE #16
DIMENSION HARDWOOD
Prepared By
Nicolas Engalidiev
Reviewed By
Henry Huber
Jeffrey Wartluft
Eugene Wengert
VITA
Published By
VOLUNTEERS IN TECHNICAL
ASSISTANCE
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Arlington, Virginia 22209 USA
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Dimension Hardwood
ISBN: 0-86619-303-3
[C]1989, Volunteers in Technical
Assistance
INDUSTRY PROFILES
Introduction
This Industry
Profile is one of a series briefly describing small or medium-sized industries.
The
Profiles
provide basic information for starting manufacturing plants in developing
nations.
Specifically,
they provide general plant descriptions, financial, and technical factors fox
their
operation,
and sources of information and expertise. The series is intended to be useful
in
determining
whether the industries described warrant further inquiry either to rule out or
to
decide upon
investment. The underlying assumption of these Profiles is that the individual
making use of
them already has some knowledge and experience in industrial development.
Dollar values
are listed only for machinery and equipment costs, and are primarily based on
equipment in
the United States. The price does not include shipping costs or import-export
taxes,
which must be
considered and will vary greatly from country to country. No other investment
costs are
included (such as land value, building rental, labor, etc.
as those prices also vary.
These items
are mentioned to provide the investor with a general checklist of
considerations for
setting up a
business.
IMPORTANT
These
profiles should not be substituted for feasibility studies. Before an
investment is made in
a plant, a
feasibility study should be conducted. This may require skilled economic and
engineering
expertise. The following illustrates the range of questions to which answers
must
be obtained:
*
What is the extent of the present demand for the product, and how is it
now being
satisfied?
* Will
the estimated price and quality of the product make it competitive.
*
What is the marketing and distribution plan and to whom will the product
be
sold?
*
How will the plant be financed?
*
Has a realistic time schedule for construction, equipment, delivery,
obtaining
materials and supplies, training of
personnel, and the start-up time for the plant
been developed?
*
How are needed materials and supplies to be procured and machinery and
equipment to be maintained and
repaired?
*
Are trained personnel available?
*
Do adequate transportation, storage, power, communication, fuel, water,
and
other facilities exist?
*
What management controls for design, production, quality control, and
other
factors have been included?
*
Will the industry complement or interfere with development plans for the
area?
*
What social, cultural, environmental, and technological considerations
must be
addressed regarding manufacture and use
of this product?
Fully documented information responding to
these and many other questions should be
determined
before proceeding with implementation of an industrial project.
Equipment Suppliers, Engineering
Companies
The services
of professional engineers are desirable in the design of industrial plants even
though
the proposed
plant may be small. A correct design is one that provides the greatest economy
in
the
investment of funds and establishes the basis of operation that will be most
profitable in the
beginning and
will also be capable of expansion without expensive alteration.
Professional
engineers who specialize in industrial design can be found be referring to the
published
cards in various engineering magazines. They may also be reached through their
national
organizations.
Manufacturers
of industrial equipment employ engineers familiar with the design and
installation
of their
specialized products. These manufacturers are usually willing to give
prospective
customers the
benefit of technical advice by those engineers in determining the suitability
of their
equipment in
any proposed project.
VITA
Volunteers in
Technical Assistance (VITA) is a private, non-profit, volunteer organization
engaged in
international development. Through its varied activities and services, VITA
fosters
self-sufficiency
by promoting increased economic productivity. Supported by a volunteer roster
of over 5,000
experts in a wide variety of fields, VITA is able to provide high quality
technical
information
to requesters. This information is increasingly conveyed through low-cost
advanced
communication
technologies, including terrestrial packet radio and low-earth-orbiting
satellite.
VITA also
implements both long- and short-term projects to promote enterprise development
an
transfer
technology.
DIMENSION
HARDWOOD
PREPARED
BY: Nicholas Engalichev
REVIEWED
BY: Henry Huber
Jeffrey Wartluft
Eugene Wengert
GENERAL
DESCRIPTION
The Product
The product
is hardwood, kiln dried and machined to dimensions
required by
customers. Products of the mill may include cut-to-size
rectangular
pieces, edge-glued panels, moldings, turnings,
cabinet parts,
stair treads and risers, and shaped pieces, as
well as
by-products useful as fuel. Most customers are manufacturers
of furniture,
cabinetwork, doorframes and windowframes,
toys, boxes,
and decorative or display items. Products vary
greatly among
mills; some mills may produce finished articles for
the consumer
market.
The Facility
To illustrate
costs, this Profile describes a medium-sized mill
operating
with one shift that produces 4,500 cubic meters of
dimension
hardwood per year. Some information is also provided
for a mill
twice as large. The annual production for a mill in a
developing
country is often less than 2,000 cu m; some are designed
to produce
more than 20,000 cu m. Some hardwood mills
produce sawn
lumber, which is the raw material; some grow timber
to replenish
this valuable natural resource.
The raw
material and the product are heavy and bulky. Thus, the
mill should
be located on a railroad or waterway, or near an
all-weather
road that can be used for motor transport.
GENERAL EVALUATION
Prospects for
development are good if the source of rough lumber
is far from
the mill's customers (assembly plants) and the transportation
facilities
are average. Then the customers profit from
reduced
shipping costs from the mill, because kiln drying and
sawing to
size usually involve a weight loss of up to two thirds.
In addition,
the lumber is delivered in needed sizes, kiln dried
and ready for
use; users need not stockpile lumber or dispose of
large amounts
of waste. Prospects are favorable if the cost of
labor near
the source of raw material is low relative to its cost
in the
customers' area.
Outlook
Economic. The
market should be analyzed to determine whether
existing
conditions will produce sufficient sales in the target
area. The
economic outlook is good if the trend is toward the use
of dimension
hardwood by assembly plants to take advantage of
lower labor
or transportation costs.
Technical.
Sound, nonbrittle hardwood must be available. In
tropical
areas, the characteristics of some wood species may have
to be learned
by experience. The mill manager must be thoroughly
experienced.
Once the plant has started operating, the manager
and three
skilled workers should be able to train the other
workers and
reach full production in several months. A mill can
readily. meet
its training and management requirements under
conditions
that prevail in most developing countries.
Manufacturing
Equipment Flexibility
The machinery
is versatile. A few machines can produce a wide
range of
lumber sizes and a variety of products for which there
is a market.
Knowledge
Base
Personnel
should have or acquire knowledge of species characteristics;
operation and
maintenance of woodworking machinery,
including saw
sharpening and tensioning; wood-moisture relationships
(drying);
storage, packing, and shipping; and, especially,
plant safety
and quality control at every stage.
Quality
Control
Product
concerns include size tolerances, moisture content of the
wood
(measured with a meter), and consistent visual quality to
meet customer
specifications. Process concerns include giving
high priority
to preventive maintenance of tools and machinery,
and to proper
wood handling, stacking, storing, and shipping.
Constraints
and Limitations
Marketing,
the key to success, must be budgeted into the operations
from the
start; otherwise the enterprise will fail. Efficient
utilization
of capacity is also important to success.
Formal
training in mill safety and attention to hazardous conditions
are essential
to guard against serious accidents and injuries.
Hazards
include inadequate preventive maintenance of
tools,
improper disposal of wastes, inhalation of sawdust and of
formaldehyde
used in glues, insufficient protection of eyes and
ears, and
incorrect handling of lumber and sharp tools.
MARKET
ASPECTS
Users
A market
potential exists only where there is developed manufacturing
sector or an
export prospect. Marketing effort is
usually
needed in order to reach builders, as well as assemblers
and marketers
of furniture, cabinetwork, and other items that use
wood
components.
Suppliers
Sawmills
produce the raw material, which is sawn lumber that may
be air dried
or kiln dried. Knowledgeable persons from the dimension
plant must be
prepared to visit the sawmill at the time of
purchase. The
cost of raw lumber transport to the dimension mill
helps to set
the selling price of the finished dimension product.
All needed
materials and supplies are expected to be available
locally. If
the rough-sawn lumber has been dried before delivery,
it is then
cut to size.
Sales
Channels and Methods
Sales
generally are directly to manufacturing industries according
to their
specifications of dimensions, moisture content, and
degree of
machining. Such standard items as moldings may be
marketed
through brokers.
Geographic
Extent of Market
Markets,
including export markets, depend on strong consumer
acceptance of
the processed species of wood.
Competition
For several
decades there has been a slow increase in the substitution
of softwood
for hardwood for many applications. The substitution
has not
overtaken the absolute growth in hardwood
demand.
Success in meeting all forms of competition requires, the
following
capabilities:
o
Delivering commercial volumes of product.
o
Delivering quality to meet commercial
specifications.
o
Meeting delivery dates.
o
Maintaining competitive prices.
o
Customer service.
PRODUCTION
AND PLANT REQUIREMENTS
Requirements
are given for a medium plant. If planning for a
larger plant,
merely scale up the version of the medium plant.
However,
equipment, supplies, and labor requirements of the
larger plant
vary greatly according to the degree of product
diversification.
Medium Plant
Annual
Output:
4,500 cu m
REQUIREMENTS
Infrastructure,
Utilities
Land
0.8 ha
Building
432 sq m
Electric Power (local)
35 kW
Fuel (can be scrap wood)
Water (sanitation, fire)
Dry kiln(s), capacity
. . .
240 cu m
dimensions
. . .
6 m by 12 m
Major
Equipment & Machinery
Tools
Machinery
Cutoff saw
1
Ripsaw
1
Molder
1
$175,000
3-drum sander
1
Trim saw
1
Planer
1
Boiler (for dry kiln, 20 kW;
can be oil fired)
25,000
Support equipment
parts
Factory truck
2,000
Forklift
25,000
Estimated
Costs:
Equipment and machinery
$227,000
Dry kiln
350,000
*TOTAL
ESTIMATED COSTS $577,000
Materials
& Supplies
Raw Materials
Hardwood lumber
5,700 cu m
Supplies
Lubricants & hand tools
Cutting tools & abrasives
Maintenance & spare parts
office supplies
Gas (petrol), oil & maintenance
of truck
Packaging
pallets, boxes, cartons
strapping, tarps
Labor
Skilled, direct
Machine operators
3
Semiskilled
3
Unskilled
3
Indirect Labor
Manager/sales
1
office
Maintenance/set-up mechanic
1
Truck Driver
1
Distribution/Supply
Flow
Amount in per day
24 cu m
Amount out per day
12 cu m
(+ 8-10 tons of residue)
Market
Requirements
The medium
plant could supply 100 family furniture enterprises or
fewer larger
companies.
*Based on $US
1987 prices. These are guidelines to equipment
costs; they
are not intended to be used for budgeting. Actual
costs must be
determined for the time and place of purchase.
Remarks
The Diagram
shows a sample layout approximately 18 by 24 meters,
dhx6.gif (600x600)
not including
the dry kiln. The general workflow in the main area
is from dry
lumber storage to processing to shipping. Management
and
maintenance space are also shown.
REFERENCES
Unless
otherwise stated, addresses are in the United States. In
U.S.
publications, lumber volume is expressed in board feet (foot
board
measure, fbm, or bd. ft. The abbreviation mbf usually means
thousands of
board feet). 1,000 fbm = 2.3598 cu m; 1 cu m =
423.76 fbm.
Technical
Manuals and Textbooks
Brown, W. H.,
1978. Timbers of the World (9 regional volumes,
paperback).
Timber Research and Development Association (TRADA),
Hughendon
Valley, High Wycombe, Buckinghamshire HP14 4ND, United
Kingdom
Groneman, C.
H., 1981. General Woodworking. 6th ed. 344 pp.
McGraw-Hill,
Inc., 330 West 42nd Street, New York, New York
10036 USA.
Noltmeyer, V.
E., et al., 1967. Safety Accounting and Cost Controls
Manual in the
Hardwood Conversion Industry. National Dimension
Manufacturers
Association, 1000 Johnson Ferry Road, Suite
A-130,
Marietta, Georgia 30068 USA.
Pepke, E. K.,
and M. J. Kroon, 1981. Rough-Mill Overator's Guide
to Better
Cutting Practices (Publ. NA-TP-4). U.S. Department of
Agriculture,
Forest Service, Northeastern Area State and Private
Forestry,
Broomall, Pennsylvania 19008 USA.
Periodicals
Furniture
Dimension Stock Report. Industrial Extension Service,
School of
Engineering, North Carolina State University at
Raleigh,
Raleigh, North Carolina 27695 USA.
Wood and Wood
Products. Vance Publishing Co., 400 Knightsbridge
Parkway,
Lincolnshire, Illinois 60069 USA.
Woodworking
Digest. Hitchcock Publishing Co., Wheaton, Illinois
60188 USA.
Trade
Associations
Association
Technique des Bois Tropicaux, 8 rue de Colonel Moll,
F-75017
Paris, France
International
Hardwood Products Association, Inc., P.O. Box 1308,
Alexandria,
Virginia 22313 USA.
Woodworking
Machinery Manufacturers Association, 1900
Arch
Street,
Philadelphia, Pennsylvania 19103 USA.
Directories
Directory of
the Forest Products Industry. Annual. Miller-Freeman
Publications,
Inc., 500 Howard Street, San Francisco, California
94105 USA.
Hitchcock's
Woodworking Directory and Handbook. Annual. Hitchcock
Publishing
Co., Wheaton, Illinois 60188 USA.
VITA
Resources
VITA has
volunteer specialists available in wood products, as
well as
documents on file and in microfiche dealing with the wood
industries.
VITA Venture
Services
VITA Venture
Services, a subsidiary of VITA, provides commercial
services for
industrial development. This service-for-fee includes
the
following: technology and financial information,
technical
assistance, location and brokerage of used manufacturing
equipment,
marketing, and joint ventures. For further information,
contact VITA.
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