Still lots of headwinds to deal with:

•  Economy is getting  better, albeit very slowly
• Government debt issues – all levels of government – exacerbates      the job probm
• Much of Europe in recession  – major banking problems –             Cyprus is latest – China is slowing too
• Housing’s main  problems  -    Weak domestic economy made     worse by slowing world economy; weak job market; poor income     growth; high debt levels; and tight credit environment

Demand ( not enough), debt and uncertainty are some of  serious problems that are impacting the economy.

Job creation is key to better demand!!! – this requires better vision from “Washington”

To see the full report, please follow this link

The housing report is a free service of Virginia Tech and is intended to help you gauge future business activity.  Al Schuler gave us permission to include his monthly housing report in this mailing as well.  All past housing reports are archived at:http://woodproducts.sbio.vt.edu/housing-report/.

We would like to thank all who responded to our survey.  We are currently analyzing the data and we will keep you informed about the findings.  Your support is greatly appreciated!

Please let me know if you have any questions.

Respectfully,

As we get close to spring break on campus (in two weeks) it is im-pressive to see the growth of our program and the energy of the stu-dents this semester. We have 80 students now in our department and many are majoring in Forest Products Business. Firms are al-ready on campus interviewing for summer internships and full-time positions. I think this is a great indicator of our economy’s and the industry’s resurgence. We will graduate around 25 students in the spring, so if your companies are looking for full time employees, please contact us to set up interviews.

On a personal note, last fall our department head in Sustainable Biomaterials stepped down and the dean has asked me to take it on for a while, so I am currently acting as in-terim department head of our program. It is nice to be working regularly with my colleagues in the department again and seeing students on a more regular basis. Students are busy with the Wood Enterprise Institute where they will be designing, manufacturing and marketing 3 different products this year. The packaging science program continues to grow and students are learning to efficiently design and build packaging for the products we ship around the world.

Currently our faculty are working on such items as energy savings in mills, international marketing efforts, lumber use in the pallet industry, secondary manufacturing issues, and a variety of topics in the area dealing with cellulosic chemistry. It always amazes me the breadth of our research areas in the department. But, they all have one common theme: Assisting the forest products industry in the sustainable development and use of our natural resources. Whether it is new products using cellulose, increasing manufacturing efficiencies in your mills, or developing new markets, our research efforts try to assist our industry in increasing its competi-tiveness.

In this newsletter is a listing of upcoming continual education classes, some industry news and a short article on energy savings research that Dr. Quesada and his students are doing in a secondary mill. There still remain a lot of areas in which mills can reduce their energy costs and this research shows another way to tackle the problem. If you have any questions regarding this newsletter or the Center, please feel free to contact me at 540-231-7679 or rsmith4@vt.edu.

To read the full news letter, please follow this link.

Participants of the kick-off meeting of the US-India JERCD Lignocellolosic Biofuel Systems project posse for a group picture at the University of Florida in Gainesville, FL.

 The project is part of the $125 million US-India consortia to develop joint research in solar energy, building efficiency, and lignocellulosic biofuel systems. SBIO researches Smith and Quesada are part of the lignocellulosic biofuel systems project’s team that has as a goal to develop sustainable advanced second-generation biofuels.

The biofuels U.S. project team is led by the University of Florida and it includes the University of Missouri, Montclair State University, Texas A&M University, and Virginia Tech. Private partners Show Me Energy and Green Technologies are also part of the team. On the Indian side, the project includes several governmental and private partners.

The lignocellolosic biofuel systems project has several tasks including feedstock selection and development, biofuel production, supply chain management, marketing and social, economics, and environmental impacts. Drs. Smith and Quesada-Pineda will lead the supply chain management and marketing aspects of the project. Also, Dr. Janaki Alavalapati, Department Head of the Forestry Resources and Environmental Conservation (FREC) Department at Virginia Tech, participates in the project as leader of the Virginia Tech team.

If you wish to know more about the project please contact Dr. Henry Quesada-Pineda at quesada@vt.edu

As part of the University of Minnesota’s Forest Products Management Development Institute service to its members and the industry in general, and in collaboration with Virginia Tech’s Center for Forest Products Business, a study of educational needs in the Forest Products Industry was conducted in the summer of 2012. This document summarizes the results from the study and compares the educational needs of forest products companies in Minnesota and Virginia.

Table 1. Participant’s type of business and size.

During May-July of 2012, a web survey was conducted concurrently in Minnesota and Virginia to assess the educational needs of the Forest Products Industry. In total, 73 companies participated in Minnesota and 101 in Virginia. Participants belonged to many subsectors, ranging from lumber manufacturers and distributors, to secondary manufacturers, such as producers of kitchen cabinets and millwork.  Company demographics of respondents are presented in Table 1. A 15-item questionnaire was developed and tested. The final version contained the following sections: demographic information (primary business, number of employees, number of facilities, and type of product distribution), business management factors (major factors for business, strategic plan, the major performance measures used, product development), training needs (business factors, greatest training need, training delivery method, current training providers), and one open question for comments. Following the survey, executives in 19 companies were interviewed to verify and expand on the results from the survey.

To read the complete research update, please follow this link.

CFPB Director's Bob Smith and CFPB editor's Scott Lyon visiting a wood products retailer in Panama during February 2010.

I have visited with many center members recently and there is a general feeling that our industry is slowly improving, but we will need to adjust to a smaller total domestic market for wood. I just taught our sales course at Oregon State University, and the class was fairly optimistic about the economy improving and companies are seeing an increase in export activity from the West coast. Those in the export market continue to see opportunities overseas. The market reports indicate now that over one-third of upper grade hardwoods are now ex-ported, and there is an increase in exports of softwood lumber. The housing predictors now say that it will be late in this decade before we get back to nor-mal housing starts and recent statistics show that houses are getting smaller.

All of this indicates that we need to work smarter, not necessarily harder. We need to get closer to our custom-ers and determine how we can serve them better, we need to be able to capture market opportunities when they arise, and to fine-tune our operations to be as efficient as possible. That is what our changes in the department are training our students to do. In this newsletter you will read about a project on energy auditing that is being led by Dr. Henry Quesada. Every dollar saved in energy or the elimination of any waste is a dollar right to the bottom line of the company. Dr. Earl Kline describes the efforts of the Wood Enterprise Institute (WEI), which is a student-run enterprise from market development to product manufacturing. It is a one-year program that allows our students to experience running a company, as well as dealing with company issues on a daily basis. The WEI is one way in which we are training our students to be better prepared to meet your needs.

I wish you a great summer and thank you for your continued support of our center. I hope you will visit us at our new web address (www.cfpb.vt.edu). If you have any questions, please contact me at rsmith4@vt.edu  or 540-231-7679.

Robert Smith
Director of the Center for Forest Products Business

To access the Spring 2012 newsletter, please follow this link

Dr. Henry Quesada-Pineda promotes Appalachian wood products in Costa Rica

More than 25 people attended the short course that included topics such as primary processing, product design, continuous improvement, and strategy and marketing planning. Dr. Quesada-Pineda presented results on a marketing research project funded by the Federal State Market Improvement Program (FSMIP) at the U.S. Department of Agriculture. The main goal of the project was to uncover potential opportunities for Appalachian wood products in Central America and Costa Rica. Costa Rica consumes over 1.1 million m3 of lumber per year. Due to the country’s high regulations on the harvesting of natural forests, most of the demand is fulfilled with plantation lumber and imports.

The wood products industries located in the region of Hojancha, Costa Rica are well organized and they produce a variety of high value-added products such as solid furniture, log cabins, and souvenirs for the local and export market. The group is very interested in finding a good supply of hardwood lumber given the current situation with the local supply and it seems that Appalachian hardwoods could be a very good fit to fulfill the increasing demand.

If you wish to read the full report on the project Marketing Opportunities for Appalachian Wood Products in Central America, please contact Dr. Henry Quesada-Pineda at quesada@vt.edu

Location:   

USDA Forest Service Wood Education & Resource Center
301 Hardwood Lane Princeton, WV 24740

Date:   March 22, 2012
Fee:   $50
Registration:   Online at: http://www.cpe.vt.edu/reg/rec/

Website:   http://woodscience.vt.edu/workshops/reducing-energy-costs/

Preliminary agenda: To get a copy of the workshop agenda, click here

Why attend?

Energy expenses are the third largest cost for the US forest products industries, after raw materials and labor. Over the last decade, electricity prices have risen at an average annual rate of 1.4%, diesel prices by 9.3%, and prices for natural gas for industrial use by more than 100%. Natural gas and electricity account for about two fifths of total energy consumption of the wood products industry. These higher energy costs undoubtedly negatively impact the industries profitability, which has also been significantly impacted by other issues such as hardwood stumpage prices, higher transportation costs, increasing government regulations, a challenging economic situation, and the ongoing globalization of markets. Given the trajectory of energy prices and the energy intensity of the US hardwood industry, energy consumption and the resulting costs, strategies to reduce energy consumption should be a priority issue in order for our industry to remain competitive.

More information:  Contact Brian Bond at (540) 231-8752, email bbond@vt.edu
or Angela Riegel at (540) 231-7107

Introduction

Exporting wood products offers many advantages for firms entering the global market, such as increased profits and credit, market growth, and economic strength (Parhizkar 2008; McMahon and Gottko 1989). In the past few years, parts of the U.S., such as the Appalachian region, have suffered from the economic crisis resulting in forest products mill closures and loss of employment due to an increase in competition. An increase in global competition has caused the decrease of domestic markets for U.S. furniture. This increase in competition has taken a toll on the Appalachian hardwood lumber industry (Bowe et al. 2001). Forest products companies in the Appalachian region must be innovative in their marketing strategies to find potential markets for their products (Naka et al. 2009). Therefore, Appalachian wood products companies may need to increase product competiveness by expanding export markets and improving product promotion (Wang et al. 2010). International marketing of wood products is essential for the Appalachian region to strengthen its economy (Hammett 1996).

To read the complete research update here Center Research Update 2011 – Central America

It is starting to cool off, the students are taking all the parking spots, and the Hokies won their first football games of the season. Therefore, it must be fall in Blacksburg and classes are in full swing. We had an earthquake and hurricane hit the state within one week, which many believe has something to do with our proximity to Wash-ington, D.C. The old Chinese saying, “May you live in interesting times,” is considered both a blessing and a curse. One thing is for certain, these are in-teresting times.

It is starting to cool off, the students are taking all the parking spots, and the Hokies won their first football games of the season. Therefore, it must be fall in Blacksburg and classes are in full swing. We had an earthquake and hurricane hit the state within one week, which many believe has something to do with our proximity to Wash-ington, D.C. The old Chinese saying, “May you live in interesting times,”  is considered both a blessing and a curse. One thing is for certain, these are in-teresting times.

I wrote in our center annual report that if we listen to the media long enough, we should either hide in a cave or jump off a cliff. However, working with students on campus is refreshing, and they provide hope for our future. In my sales courses, I teach a section on staying positive, and here is a fact that I share during my presentations. Statistics (those numbers we make up to give creditability to what we are about to say) indicate that the average child smiles or laughs 300 times a day before the age of five. The average adult smiles less than 30 times a day. Why the disparity? I believe that children don’t read the news and are not impacted by those around them as much as adults. I personally think this reduction in enjoyment is something we should be extremely concerned about. Of all the indicators of successful leadership, having and showing a positive atti-tude is one of the highest ranked traits (yes, more statistics).

Our industry has changed dramatically in the last four years, with production off by 30 percent or more in most sectors. Yet many firms are expanding operations and new firms are coming into the business. We work in a dynamic, changing, and valuable sector of our economy. Wood is used more than any other resource in the world, and we will continue to utilize more wood in the future. In other words, we are almost guaranteed a market for our efforts. Our job at the center is to train young adults and your employees to be able to compete in this changing landscape. We do this through teaching our students the latest business practices, providing short courses to bring this information to your employees, and conducting research to better understand our markets and business management practices.