Lumber & Plywood Product Manufacturing Industry Profile

Companies in the sawmill industry engage in the sawing of dimensional lumber, while companies in the plywood manufacturing industry make veneers and/or plywood, engineered wood members, and reconstituted wood products. Large US companies include divisions of Weyerhaeuser, Louisiana-Pacific, Georgia-Pacific, and Universal Forest Products.

About 5,000 lumber and plywood product manufacturers operate in the US, generating annual revenue of about $35 billion. US output by lumber and plywood product manufacturers is expected to experience a high growth rate over the next two years. Key growth drivers include the rebound of the US housing and remodeling markets.

For more information on related industries, see separate profiles for Wood Flooring Manufacturing and Wood Window & Door Manufacturing.

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 the industry is concentrated: the 50 largest companies generate about 60 percent of revenue. The sawmill segment is fragmented: the 50 largest companies generate about 40 percent of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Sawmills process raw logs in a few simple operating steps. Logs ...