Commonwealth Forests

bullet1 Chapter 3: Benefits from the forest
bullet2 INDUSTRIAL PRODUCTS

bullet3 Trends

The broad industrial trends indicate an increase in consumption in most industrial wood product categories, an increase in global trade in forest products despite the constraints on growth mentioned earlier, an increase in the use of engineered wood products, and an increase in material substitution.

The economics of wood supply, a very important component of forest management, have been turbulent, especially in those countries dominated by natural forests. There are the normal business cycle trends (such as in the housing markets), there is a marked increase in natural disturbances of the forest, such as wind, fire, insect and disease which affect both long term and short term supply, and there are competing uses of the forest leading to stronger log prices which can expand the economic zone. At the macro level, there has been industrial restructuring in four ways: 1. the industry is further amalgamating, creating larger companies on the global stage where the head offices are not in Commonwealth countries; 2. they are downsizing their manufacturing in some regions due to ageing plants, inefficient facilities or inappropriate product lines; 3. they are finding new business partners such as the energy sector or agribusiness; or 4. they are shifting their investments to locations with low input costs (e.g. labour), new emerging markets (e.g. India) or to areas where land management is not as complex (e.g. private industrial timberland).

At a more specific level the manufacturing sector has seen a marked decline in some specific industries such as newsprint, but a growth in industries such as Oriented Strand Board (OSB) and Medium Density Fibreboard (MDF) panels.  There has also been a shift in production between countries.

In many Commonwealth countries, where property rights are unclear, there has been an increase in conflict over land use.  The challenge is to create industrial processing capabilities that are both viable and can incorporate the high costs of the ‘transition period’.