Research Brief #3

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

Research Objectives

Determine the structure of the primary solid wood products industry in the State of Louisiana including: market areas served by the industry, raw materials used, the mix of products shipped, distribution channels employed for finished goods, application of marketing techniques and critical factors for industry success.

Synopsis of Results

• The primary wood products industry in Louisiana consists of 81 companies compared to approximately 750 companies in the secondary wood products sector.
• Just over 36 percent of companies surveyed have 50 employees or more and 18.2 percent have 200 or more employees.
• Nearly 50 percent of companies surveyed had sales of $10 Million or more in 1993 from Louisiana facilities.
• Geographically, the largest percentage of sales in 1993 was made to states outside Louisiana (47%) with 41 percent of respondent company sales in Louisiana and 12 percent of sales to export and industrial markets.
• A majority of respondents are strictly softwood producers (45.5%), while 30.3 percent are strictly hardwood producers and 24.2 percent are producers of both softwood and hardwood products.
• Respondents indicated that the primary methods used to promote their products are word-of-mouth followed by distributor support and salespersons.
• Product quality, company reputation and the development of long-term relationships with customers were identified as the primary competitive factors contributing to success in the marketplace.
• Securing a consistent supply of quality raw materials, closely followed by volatile pricing were identified as the greatest impediments to success for respondent companies.
• The factors that most influence respondents decisions to expand current facilities or build new facilities are workman's compensation, proximity to raw materials, taxes, availability of capital, labor issues and community industrial climate.
• Respondents indicated an interest in receiving information and training from the Louisiana Forest Products Laboratory in a number of areas including log grading, drying, cost reduction and financing.

Conclusions

The study revealed a number of issues that warrant further investigation including:

1. identify characteristics of primary wood products industries in states that have similar resource profiles;
2. investigate plausibility of the development of secondary wood products manufacturing and/or buying cooperatives that could create purchasing and sales/marketing leverage through economies of scale to keep more primary production in-state and;
3. expand the role of the Louisiana Forest Products Laboratory as the providers of information and support to the primary solid wood products industry.

Researchers

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

Target Group

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

Methodology

Using a directory of Louisiana primary wood products companies compiled by the Louisiana Forest Products Laboratory, 81 solid wood primary manufacturers were surveyed.

The surveys were conducted using mail surveys. In an effort to maximize response rates, follow up phone calls were conducted. A response rate of 41 percent (33 companies) was achieved.