Research Brief #1

An Overview of the Louisiana Secondary Wood Products Industry
Louisiana Forest Products Development Center
Louisiana State University
Baton Rouge, LA

Research Objectives

Determine the quantities, sources, grades and mix of raw materials used in the production of secondary wood products in the State of Louisiana.

Determine the market areas served by the industry, the mix of products shipped, distribution channels employed for finished goods and application of marketing techniques in the secondary wood products industry.

Synopsis of Results

• The secondary wood products industry (SWPI) in Louisiana can be characterized as fragmented and consisting of many small establishments with over 75% of companies surveyed having less than 10 employees and over 50% with 4 or less employees.
• Geographically, marketing of Louisiana SWPI products is generally confined to Louisiana with a minority of companies with national sales and fewer yet selling internationally.
• Respondents indicate a rudimentary application of marketing principles or strategic planning with most companies relying on word-of-mouth to promote products directly to consumers.
• Respondents indicated that nearly 27 percent of the time, they sourced raw material inputs from outside the State of Louisiana. In addition, because the origin of material purchased from in-state suppliers can not be traced, the percent of out-of-state purchases indicated is probably a conservative estimate.
• Primary issues identified by respondents regarding SWPI industry improvement are production oriented and include the need for improved grading, improving the quality of the raw material input and improved kiln drying capacity and capabilities.

Conclusions

1. identify characteristics of secondary wood products industries in states that have similar resource profiles;
2. investigate reasons that out-of-state suppliers are used and what percentage of in-state supply originates elsewhere;
3. investigate plausibility of the development of manufacturing and/or buying cooperatives that could create purchasing and sales/marketing leverage through economies of scale and;
4. expand the roles of the Louisiana Furnishings Industry Association and the Louisiana Forest Products Development Center as the providers of information and training to the secondary wood products industry.

Researchers

Richard P. Vlosky, Assistant Professor, Forest Products Marketing
Louisiana Forest Products Development Center

Paul Chance, Executive Director
Louisiana Furnishings Industry Association

Target Group

Louisiana secondary wood products manufacturers
Louisiana economic development and public policy officials

Methodology

Using a directory of Louisiana secondary wood products industries compiled by the Louisiana Forest Products Development Center and the Louisiana Furnishings Industry Association with a known population of 512 companies, 225 companies were surveyed. Companies were selected from the population in an effort to adequately represent the industry and cover the spectrum of products comprising the secondary wood products industry.

The surveys were conducted over the telephone by personnel trained in the wood products industry to minimize response misinterpretation. Contact time averaged five minutes with many conversations in excess of ten minutes. Companies were called during normal business hours on all days of the week. In an effort to maximize response rates, up to four follow up calls were conducted if calls went unanswered or if the primary contact person was not available. A response rate of 44 percent (88 companies) was achieved.