CLT in the South?
By Richard Vlosky and Mason T. LeBlanc
As the United States looks for ways to reduce its carbon footprint, the commercial construction industry and architects are searching for more sustainable products that are cost effective, energy efficient, structurally sound and environmentally friendly.
At the same time, as housing starts have not rebounded to pre-recession levels, forest landowners and wood products manufacturers are seeking alternative markets.
The Louisiana Forest Products Development Center, Louisiana State University Agricultural Center partnered with more than a dozen university, government and industry entities to conduct an analysis of the market environment and potential of cross-laminated timber (CLT) in the U.S. South constructed from Southern Yellow Pine (SYP).
Previous CLT research and development to date has focused on using Douglas-fir and other species from the Pacific Northwest region of the United States, as well as spruce-pine-fir from Canada and imported species from European countries.
Softwood Lumber Manufacturing in South
Softwood lumber markets in the South have been regaining momentum since the recession of 2008 as U.S. demand continues to increase. In 2009, U.S. customers purchased close to 31 billion board feet of softwood lumber, which was projected to reach 49 billion board feet in 2018.
The recession caused a significant slump in softwood lumber demand, which in turn allowed trees to grow larger on the stump as landowners waited for low stumpage prices to recover.
In the past independently owned, smaller sawmills made up the lumber industry in the South. During the mid-2000s only about a fifth of the South’s lumber mills were larger than 200 million board feet in size, while approximately a third were smaller mills of less than 100 million board feet. The number of softwood sawmills in the region declined from 420 to 298 from 1995 to 2009 producing a high of 19.5 billion board feet in 2008.
Today, lumber mills in the South are expanding, and are bigger with many managed and owned by large companies rather than independent owners. They currently produce about 22 billion board feet of lumber.
Large sawmills are taking advantage of the low sawtimber prices in the region. Since 2011, the production capacity has increased by 3 billion board feet and is on an upward trajectory from a number of variables.
Housing trends, import tariffs, and an affordable feedstock have accelerated the Southern pine industry.
Canadian firm West Fraser holds the largest production capacity at 3.1 billion board feet, followed by Weyerhaeuser with 2.5 billion, and Georgia-Pacific with 2.4 billion.
The top 10 companies in the South comprise 66 percent of total production capacity, and Canadian firms account for a third of capacity.
Most of these competing firms have announced plans to increase their capacity by expanding existing mills or building new ones, causing a high geographical agglomeration.
In short, Southern sawmills are becoming fewer yet larger as companies seek to improve profit margins through efficiency and sourcing of low cost timber.
An Emerging Sector
Mass Timber has been produced and used in many forms over the past decade. Examples are Glulam Beams, Laminated Veneer Lumber (LVL) and Parallel Strand Lumber (PSL). More recently, new entrants have been developed and are being adopted in the North American engineered wood product building materials family of products.
Panel products like Cross-Laminated Timber (CLT), Nail-Laminated Timber (NLT), Dowel-Laminated Timber (DLT) and Mass Plywood Panels (MPP) have experienced years of product testing, manufacturing learning curves, yet limited market space.
CLT, the focus of this article, has been an established industry in Europe for decades, but it is in its infancy stage in the United States and Canada. CLT manufacturing and use in multi-story buildings and other structures is a well-established and fast-growing industry in Europe but is in its infancy stage in the United States.
The potential markets for CLT in the United States are enormous if architects, builders/contractors, engineers and building owners accept the product as a substitute for steel and concrete construction. The Southern United States has ample Southern Yellow Pine (SYP) resources to meet the potential market for CLT, as there are many sawmills in the region that have increased production significantly after the post-recession reduction in demand for dimension lumber.
Led by CLT, the North American mass timber-panel manufacturing industry is poised for substantial growth, projected to double in size in terms of projects and manufacturing capacity annually for the next four years. The International Mass Timber Conference, held in Portland, Oregon, for the past three years, as well as efforts to disseminate knowledge by WoodWorks, a national organization, awareness and understanding of this emerging market is accelerating.
This is just the beginning of a long upward trajectory for an industry that will replace traditional construction materials like steel, concrete and masonry in many applications. Mass Timber Panels also will be used in conjunction with traditional building materials, further expanding markets and use. As the environmental, economic, construction and aesthetic implications of using wood are better understood by architects, developers, builders, engineers and government officials, the mass timber industry will be firmly established in both non-residential and residential construction in the future.
A comprehensive study was conducted in fall 2018/spring 2019 to better understand the dynamics of CLT perceptions, awareness and potential for adoption from architects, non-residential builders, engineers (civil, architectural, building) and hardwood and softwood lumber mills in the study region.
This article focuses on the softwood lumber mill segment. Softwood lumber is the main feedstock for CLT, and as such, it was essential to better understand the supply side. A paper-based survey instrument was developed with input from key partners versed in the sawmill sector. Mail-based survey techniques were used to assess the current market knowledge base of southern sawmills toward CLT and its potential in the Southern United States. A random sample was taken from the softwood sawmill sector in the study region. Following accepted survey administration practices, pre-notification postcards, a first survey mailing with a postage-paid envelope, reminder postcards, and a second survey mailing were sent to 412 sawmill recipients. After accounting for undeliverable surveys, primarily firms that had gone out of business, incomplete surveys, and non-responses, the adjusted response rate was 18 percent with 51 usable responses.
Results: Respondent Demographics
The highest response rates came from the states of Alabama, North Carolina and Mississippi, comprising 18 percent, 16 percent, and 14 percent of responses, respectively.
Least represented were Tennessee, Florida and Louisiana with 6 percent, 4 percent and 4 percent of respondents. Most of the sawmills were moderately sized in terms of employment, with 56 percent employing 20-250 people, while 6 percent employed more than 500 and 20 percent had fewer than 10 employees.
If CLT is a possible new sales channel for softwood lumber producers, we looked at current customer bases to see where market shifts might occur. With multiple responses possible, 35 percent of respondents sell to wholesalers at the top of the list, followed by preservative treating companies/remanufacturers/export (18 percent), stocking distributors (12 percent), and non-residential builders (9 percent).
What Do They Know About CLT?
While the CLT market is poised for substantial growth, results indicate that respondents are generally unfamiliar with CLT. Forty-one percent indicated that they were not at all familiar with the product while 41 percent were somewhat familiar and 18 percent were very familiar. The recent establishment of a CLT manufacturer within the region seems to be slow in gaining the attention of Southern sawmills, as 53 percent of respondents reported they knew nothing about the current CLT manufacturers within the US; only 2 percent were very familiar.
Will they sell lumber to CLT manufacturers? Can they meet CLT lumber requirements? How much will they charge?
While the lack in familiarity may be a concern for CLT manufacturers hoping to locate in the South, 36 percent of respondents said they were somewhat or very likely to sell lumber to a CLT manufacturer operating in the region, while 8 percent of respondents have already sold lumber to a CLT manufacturer. Seventy-seven percent of respondents would not require long-term contracts with CLT manufacturers, but 65 percent said they would accept them.
The capability of Southern sawmills to produce CLT grade lumber is not an issue. Generally respondents reported they could meet CLT lumber specifications, with 65 percent saying they could dry wood to a 10-12 percent moisture content; however, 48 percent are able to sort and provide higher density wood specifically for the CLT market.
There are many opportunities for educating many players in the CLT supply chain and influencers such as architects and builders. Softwood lumber manufacturers indicate the top areas or experiences they would like to receive or participate in to become better educated on CLT. Although this study established a general unfamiliarity of CLT and CLT manufacturers from the perspective of Southern softwood sawmills, the opportunity to increase the knowledge and expand the industry presents itself. This is an opportunity for CLT education providers to target this segment. More than 50 percent would like to make contacts with builders that use CLT, followed by nearly a third desiring technical specifications for CLT and feedstock that they may potentially provide.
Many respondents expressed a desire to learn more about, and potentially enter the CLT sector. At the end of the day, they also shared a positive outlook regarding CLT that will be used by builders in 2020. Fully 58 percent of respondents think that CLT use by builders will increase somewhat or significantly in 2020. Only 6 percent thought the market for builders will decline.
Although the nexus of CLT production has been in the Pacific Northwest, CLT manufacturers are focusing more attention on supplying the eastern and southern U.S. markets. Production is coming on line in the South with mills in Jasper, Texas, and Dothan, Alabama. A new mill is planned for Conway, Arkansas. CLT production using Southern Yellow Pine will continue to grow significantly over the next five years. Early adopters will enjoy a competitive advantage. P
(Richard Vlosky, Ph.D. is Director, Louisiana Forest Products Development Center, and Crosby Land & Resources Endowed Professor of Forest Sector Business Development, School of Renewable Natural Resources, Louisiana State University AgCenter. Mason T. LeBlanc, MS is Procurement Analyst with Drax Biomass, Monroe.)