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Manoir Richelieu Spring Meetings
06-12-2019 8:00 am
Category:  Meetings

SLICED NORTH AMERICAN HARDWOOD VENEER: A PRECIOUS RESOURCE

 

The authors Steve Umansky and Ulli Kaempfe are respectively, President of Kodiak Veneers of Victoriaville, Québec and Manager of operations with Interforest in Durham, Ontario.

 

Over the past several years, our marketplace has changed dramatically. We have seen the exodus of furniture making to China; our markets invaded with imported Chinese hardwood plywood, thin decorative hardwood veneers, kitchen cabinet and furniture components. The North American hardwood plywood production has been devastated and consequently, hardwood veneer splicing output has been crippled. We would submit that hardwood veneer splicing is at 20% of capacity in North America. Prices are decreasing, lead times are shortening. What else can we pile on?

 

However, as an industry, we are facing a problem far greater than short lead times, deflationary pricing or cheaper imports. Veneer log utilization is and will be one of the toughest issues to deal with in the future.

 

A veneer “SLICER” manufacturer has to find suitable veneer logs, roughly 5% - 10% of available hardwood logs, for transformation into thin sliced hardwood veneer. Due to our current market downturn, demand for pulp and lumber remains very low. This has caused most landowners to reduce their log harvest to a minimum. The saying goes: “Standing timber does not lose any money”. Therefore, our general log availability is quite low.

 

When “slicing” a log into veneer, would it surprise you if we told you, that only 20% to 30% of this veneer can be used for the panel market (4x8’s 5x8’s, 3x8’s, 3x9’s & 4x10’s) The rest of the material, 70% to 80%, goes into what is called furniture grade. This material is of good grade or premium grade veneer but is usually too short, or far too long for panel applications.

If you remember in the first paragraph, we mentioned, that this material is more difficult to sell these days in North America, since most of the current furniture production now resides in Asia. In the past, panel grade veneer would be shipped to veneer splicers and some of the furniture grade was exported. The rest was used by domestic furniture manufacturers who had the ability to lay up small components for their respective furniture markets (residential, office, etc.)

Current demand for spliced panel products is low and very specific. Spliced veneer faces inventories are still high and therefore, the availability is still fairly good. Due to the very specific demand of spliced faces, customers no longer buy the range of grades and this is of the utmost importance to a veneer splicer (and slicer for that matter). Inventories have and will lose their balance and the difficulty of selling face inventories will grow along with this “furniture” grade veneer.

 

The sliced veneer manufacturer has been driven into a corner due to high furniture grade inventories. What would you do, if you have trouble moving 70% of your inventoriesYou might slow down your production until your inventories come back into balance.

 

Here we are, as an industry, being environmentally responsible; certified from ISO 14001 to FSC and this is how we produce veneers. We take 5% to 10% out of the best available logs, losing half of the volume by slicing it into raw veneer. As stated, only 20% to 30% of the veneer suits our panel specifications; and yes, we lose another 50% to splice it into faces. One is shocked to think, that this is only halfway to producing a piece of furniture or a kitchen cabinet. Resource utilization has to be a part of our collective thinking moving forward. We can no longer afford to believe that our wood source in iunlimited.

 

WHAT CAN WE DO?

 

One situation that has always surprised us, is the fact that some of our downstream users cut 4x8 plywood into components for: building a cabinet or furniture or casework. They insist on 4x8’s or 5x8’s for this application. Most will say this is done for optimization and yield. We will counter with the fact that 4’ veneers are quite a bit less expensive than panel length veneers. We would be willing to argue that the costs would offset themselves and even benefit from shorter veneers.

 

Isn’t there a way to lay up 4’ veneers side by side on an 8’ core? The veneer cost savings to a plywood manufacturer would be substantial, and could be passed on “downstream”. Of course, you would have this line or seam in the middle of the panel. If this is a problem, couldn’t we use 3’and 5’ veneers to make an 8’ panel. Our point is the seam or line between both veneers could be moved for better optimization.

 

Machinery utilization has always been the reason why we have stayed away from some of these alternatives. Everything we make is geared towards 8’ plywood. However, in the foreseeable future, plywood manufacturers will be asked to think outside 4x8’s and come up with different ways to use the veneer resource that remains. Is this 2 years out… 3 years…. Supply and demand will be the decider on how long it takes.

 

This can’t be solved overnight We believe, however, that there needs to be a higher level of cooperation between panel manufacturers and raw material suppliers to find ways to use some of these “shorter” components of veneer. We need to better utilize this resource in order to “secure” long term availability. If we do not, we are certain that other species worldwide or alternative products (aluminum, paint, foil, concrete, etc) will gladly take their place.

Let’s have a little foresight as a group and begin thinking about the long-term implications of throwing away this precious resource. We need to start now!

 

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