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SITUATION AND RESULTS

Chile

 Chile's unique geography provides many opportunities and challenges for the country. Bordered by the Andes Mountains on the east and the Pacific Ocean on the west, it has a surface area of nearly 760 000 square kilometres. Chile is over 4 400 kilometres long and no wider than 170 kilometres in any area. Chile borders Peru and Bolivia to the north and Argentina to the east. The country is divided into 12 regions and the metropolitan area of Santiago, the capital. From north to south the geographical regions include: I-Tarapaca, II-Antofagasta, III-Atacama, IV-Coquimbo, V-Valparaiso, Región Metropolitana (Santiago), VI-O'Higgins, VII-Maule, VIII-Bío-Bío, IX-Araucania, X-Los Lagos, XI-Aisen, and XII-Magallanes. Within the 12 regions there are 51 provinces and 336 cities.

 The official language of Chile is Spanish, with many professionals fluent in English. The majority of its 15 million citizens live in urban areas, with over 40 percent (6 million) living in the Santiago metropolitan area. The Spanish, who ruled the country for over 270 years, founded Chile in 1541. In the later part of the nineteenth century, Chile experienced immigration from England, Germany, Italy, and Yugoslavia. Nearly 70 percent of its current population is estimated to be below 40 years of age. The total workforce in 1998 was approximately 5.5 million and unemployment was approximately 9 percent.

 Chile's economy (as measured by GDP) has grown for 18 consecutive years. Growth was predicted to be between 4 percent and 5 percent for 1999. As a result, the Chilean peso has been the most stable of the Latin American currencies in recent years. The major segments of the Chilean economy include mining, agriculture, fisheries, telecommunications and forestry.

 Exports play a major role in Chile's economy. As a percentage of GDP, they represent over 25 percent of the economy. Exports have risen from US$4.6 billion in 1980 to nearly US$15 billion in 1998. The country's major trading partners include Argentina, Brazil, Japan, Peru, Republic of Korea, the United States of America, and several European countries (Aldunate, 1999).

Chilean Forest Resources

 Over 40 percent of Chile's surface area is classified as forest land, approximately 34 million hectares (INFOR 1998a,b). Of this, nearly 16 million hectares are forested. The classification of forest land is listed in Table 1. The majority of productive native forest lands and plantations are in private ownership. The total area of plantations is over 1.8 million hectares, of which 1.4 million are radiata pine.

 There are nearly 7 000 owners of plantation forests. Over 50 percent are considered large owners, with over 5 000 hectares, and nearly one-third are small owners with less than 1 000 hectares. The three largest private owners are Forestal Millalemu, Mininco and Bosques Arauco with over 100 000 hectares each (INFOR, 1998a,b).

Table 1. Chilean Forests Types by Area

Forest type

Share of total
percent

1. Mature native forest

38

2. Second growth native forest

23

3. Scrub stand native forest

18

4. Plantations: Radiata pine, Eucalyptus, Douglas fir, Poplars, and others.

14

5. Old growth native forest

6

6. Mixed forest

1

Source: http://www.conaf.cl/inicio.html

  Chile's forests produce nearly 23 million cubic metres of radiata pine and eucalyptus annually and this growth is expected to reach 50 million cubic metres over the next 27 years (Aldunate, 1999). The Chilean Government started investing in forest land in 1974 with the passing of Decree Law 701 that introduced incentives for reforestation of forest lands. This law subsidized 75 percent of net forestation and forestry costs. Planting began in the early 1970s, but grew substantially in the 1980s and early 1990s. Annual plantings grew from an average of 80 000 hectares in 1990 to over 100 000 hectares in 1995. More recently, plantings declined to 50 000 hectares in 1997 (INFOR, 1998a).

  Throughout the 20-year Decree Law 701 programme, Chile invested over US$170 million in plantation subsidies. A 15 percent tax on profits generated by the timber easily recovered this investment. These plantations have provided the wood products to support growth in Chile's exports to US$2 billion annually in 1998 (Fundación Chile, 1998).

  Table 2 summarizes plantations by species in 1997. Currently, radiata pine comprises 69 percent and eucalyptus 21 percent of annual plantings. Most of these plantations are in three administrative regions: Talca - Region VII, Concepción - Region VIII, and Tumuco - Region IX. The Concepción region includes over 50 percent of the country's radiata pine plantations.

Table 2. Area of Chilean Forest Plantations by Species, 1997

Species

Hectares

Share of total
percent

Radiata pine (Pinus radiata)

1 420 015

75.5

Eucalyptus (Eucalyptus globulus)

317 015

16.9

Atriplex (Chenapodiaceae atriplex)

49 320

2.6

Tamarugo (Prosopis tamarugo)

20 632

1.1

Pino Oregon (Pseudotsuga menziessi)

12 620

0.7

Alamo (Platanus chiapensis)

4 114

0.2

Other species

58 001

3.0

Total

1 881 925

100

Source: INFOR, 1998

  Native forests account for over 13 million hectares of Chile's forests, of which 10 million hectares are in private ownership and the balance belonging to the government. Of the total natural forests, 38 percent is adult forest, 23 percent is second growth, 6 percent is mixed adult second growth and 18 percent is forest with tree height of less than 8 metres (INFOR, 1999).

  Table 3 shows the natural forest types of Chile by area. The 1976 National Agricultural Census showed that only 20 percent of the productive native forests were owned by 50 000 small landowners (each with less than 100 hectares), with an average of 8 hectares per owner (INFOR, 1999). The majority (over 65 percent) of native forests are in Southern Chile (Regions X - Los Lagos, XI - Aisen, and XII - Magallanes).

Table 3. Chilean Natural Forest Types by Area

Forest type

Hectares

Share of total percent

Alerce

246 993

1.8

Cipres de las Guaitecas

972 181

7.2

Araucaria

253 715

1.9

Cipres de la Cordillera

45 079

0.3

Lenga

3 400 346

25.3

Coihue de Magallanes

1 801 637

13.4

Roble-Hualo

184 783

1.5

Roble-Rauli-Coihue

1 370 218

10.2

Coihue-Rauli-Tepa

456 919

3.5

Esclerofilo

342 631

2.5

Siempreverde

4 350 814

32.4

Total

13 443 316

100

Source: CONAF-CONAMA-BIRF, 1997

Chilean Forest Products Industries

  The Chilean forest products industry has seen a tremendous growth during the last decade and now accounts for 2 percent of the world trade in forest products (Miller Freeman, 1998). Five thousand companies plant radiata pine, and 2 000 companies are involved in planting eucalyptus, while over 1 700 firms concentrate on processing wood (Aldunate, 1999). In total, over 17 000 companies are involved in planting, managing, harvesting and processing wood in Chile.

  Over 132 000 people are involved in the forest products sector of the Chilean economy. Remanufacturing wood products employed over 45 000 Chileans in 1995 (Miller-Freeman, 1998).

 The Chilean forest products sector produces both primary and secondary products. The primary segment includes logs, wood chips and pulp, fibreboard, particle board, sawnwood and newsprint. The secondary industry includes finished sawnwood, mouldings and millwork, dimension parts and furniture.

  Chile has over 1 500 sawmills. However, the majority of production is concentrated in approximately 50 mills. The typical larger Chilean sawmill produces in excess of 50 000 cubic metres annually. Total production of sawnwood is now near 4.7 million cubic metres a year and has increased fourfold since 1985. Approximately one-quarter of sawnwood production is exported (Aldunate, 1999). In 1995, about 10 percent of the sawnwood was remanufactured into finger-jointed blocks, edge-glued panels, moulding, millwork or furniture.

  Seven companies account for 100 percent of Chilean pulp production and over 70 percent of paper and containerboard (Aldunate, 1999). Leading producers include Celulosa Arauco y Constitución, Exportadora e Importadora CMPC, Celulosa del Pacífico, Papelera Concepción, and Papeles Bío-Bío (ProChile, 1999).

  Industry export sales in 1998 were over US$1.8 billion. Primary products accounted for over 70 percent of exports, while secondary products represented over 20 percent of exports. However, secondary product sales increased 400 percent between 1988 and 1998, to over US$300 million in 1998 (ProChile,1999). Export sales in 1998 were led by wood pulp worth nearly US$700 million. These products included bleached and unbleached softwood pulp, fluff softwood pulp and bleached hardwood pulp. The Chilean pulp industry represents over 50 percent of forestry export earnings (Aldunate, 1999). Other primary products included radiata pine logs and sawnwood with sales exceeding US$170 million and wood chips at US$130 million. Chile is the leading exporter of logs from South America. Nearly 90 percent of the radiata pine logs are exported to Republic of Korea and Japan, representing approximately 7 percent of the total production of 11.4 million cubic metres in 1997 (FAS, 1998).

  Export sales of secondary products were led by medium density fibreboard (MDF) wood trim with US$112 million in sales, followed by dressed sawnwood at US$43 million, and clear wood blocks at US$23 million (ProChile, 1999). The values of leading product exports are shown in Table 4.

Table 4. Major Chilean Forest Products Exports (US$ million)

Product

1996

1997

1998

Bleached pine pulp

500

480

459

Sawnwood

162

190

177

Bleached eucalyptus pulp

132

103

122

Unbleached pulp

110

93

106

Newsprint

98

77

69

Source: INFOR, 1999

  During the past decade, investment in the Chilean forest products sector has exceeded US$3 billion and this is expected to reach US$5 billion by 2005 (FAS, 1998). In 1998 the country had four particle board plants, four medium density fibreboard plants, seven plywood plants and four veneer mills. Chile's investments in the pulp industry have doubled capacity in the last few years and are projected to reach 3.5 million tons by 2010.

Major Markets for Chilean Forest Products

  Lead by the plantations that resulted from the programme, exports of Chilean forest products reached US$2 billion annually in 1998 (Fundación Chile, 1998). Total forest production rose from US$575 million in 1984 to over US$2.2 billion in 1998, with 74 percent of production being exported (INFOR, 1999). In 1997 Chile's forest product exports exceeded US$1.7 billion. Wood products and pulp represented over 9 percent of all Chile's exports that year. The increase in production by product type from 1985 to 1998 is summarized in Table 5.

Table 5. Changes in Chilean Wood Product Production: 1985 to 1998

Product type

Volume/weight

1985

1998

Change from 1985 to1998
percent

Pulp

  1000 tons

  837

2 210

164

Chips

1000 m3

 5 530*

5 458

-1.3

Sawnwood

1000 m3

2 191

4 551

107

Wood-based panels

  1000 tons

  163

  689

322

Newsprint

  1000 tons

  172

  163

-5.2

Source: INFOR, 1999 (* for 1991)

  Approximately one-quarter of Chile's wood products are used within its borders. Chile's domestic demand for forest products is equal to 5 million cubic metres of logs or nearly 2.75 million cubic metres of sawnwood. Chileans use nearly one-half of this for building construction (Miller-Freeman, 1998).

  The major domestic markets for sawnwood include manufacturing and construction. Over one-half of the wood-based composites (MDF, plywood, particle board and hardboard) produced in Chile are used in the furniture industry and one-third used in construction. The balance of wood-based composites is used in packaging or other applications (Ballerini, 2000).

  The major world markets for Chilean forest products include Japan, the United States of America, Republic of Korea, the European Union and Taiwan Province of China. Major exported products include pulp, softwood sawnwood, chips, softwood mouldings and softwood logs. ProChile (1999) indicates that the fastest growing areas are in secondary manufacturing. Between 1988 and 1998, growth in secondary manufacturing has risen from US$60 million to over US$300 million, a 500 percent increase. In the primary sector, sales during the same period rose from US$500 million to US$1.2 billion, an increase of approximately 140 percent. It can be seen that the largest increases in products are in value-added items and less in the export of basic raw materials. This supports the belief that Chile is moving into secondary production of wood products.

  The production of wood-based panels (particle board, MDF, plywood, oriented strand board [OSB] and veneers) plays an increasingly important role for the Chilean forest products industry. Current expansion in MDF and OSB will place Chile as one of the leaders in these areas in Latin America. Exports of wood-based panels have risen from nothing in 1974 to nearly US$90 million in 1996. At the end of 1997, Chile's annual board capacity reached 1.5 million cubic metres, with over one-half of this available for export (Miller-Freeman, 1998).

  One of the specific secondary markets on which Chile has recently focused is the furniture industry. Chile has increased sales of furniture from US$32 million in 1993 to nearly US$47 million in 1998, a 50 percent increase in five years (ProChile, 1999). Chile now sells ready-to-assemble furniture in the United States of America and Europe, office and kitchen furniture in Latin America, and furniture parts in Asia. These firms are now regular exhibitors/attendees at the largest furniture show in the world at High Point, North Carolina. This sector is currently investing over US$200 million in new capital projects that involve using a native species, lenga, and the construction of a new door and window frame manufacturing facility (ProChile ,1999).

  Table 6 summarizes the changes in export markets between 1985 and 1998. It can be noted that the top seven countries account for two-thirds of Chile's forest product exports and this has remained fairly constant. The main increases can be observed in the Asian and North American regions. According to INFOR (1999) the percentage increase in export markets between 1985 and 1997 were North America (+1 144 percent), Europe (+494 percent), Asia (+394 percent), South America (+156 percent) and other regions (+100 percent). They go on to state that in 1998 Chile had positive forest products trade balance of US$1.15 billion.

Table 6. Growth of Chile's Wood Product Exports by Markets (US$ million)

Country

1985

1990

1998

Japan

30

220

358

United States of America

21

50

253

Republic of Korea

22

55

122

Belgium (to EU)

12

83

96

Argentina

18

10

91

Taiwan Province of China

5

14

86

United Kingdom

7

26

38

Germany

22

76

65

Other

196

322

552

TOTAL

335

855

1 661

Source: INFOR, 1999

  The production and export of Chile's forest products currently represents a small portion of the world's total. In 1996, it represented less than 1 percent in most product categories except for industrial logs and pulp, where Chile held close to 5 percent of world trade (INFOR, 1999).

  Chile's large plantation base of radiata pine and eucalyptus should allow the country to continue its recent growth in exports. INFOR 1999 projections of exports of forest products are summarized in Table 7. With Chile becoming a major factor in the trade of forest products, numerous foreign investors have been attracted to joint ventures with Chilean companies. For 1998 some of the major corporate expansions include (ProChile, 1999):

· Boise Cascade (United States of America) announced a joint venture with Chile's Maderas Condor for a US$150 million OSB plant near Valdivia;

· Chilean-owned Bomasil and Louisiana Pacific (United States of America) announced a US$33 million OSB plant near Puerto Montt;

· Chile's Masisa and Georgia Pacific (United States of America) announced a joint chemical resin business in Concepción;

· Forestal Terranova signed an export agreement with Canada's Premdor for the production of door frames;

· Asseraderos Cholguan built a new US$25 million sawnwood production line; and

· Makor developed new sawmill technology that reduces log waste by 10 percent.

Table 7. Chilean Forest Products Export Projection

Product

Unit of measure

1992

1998

2010

Radiata pine chips

1000 m3

423

48

500

Eucalyptus chips

1000 m3

943

917

2 600

Native specie chips

1000 m3

2 140

1 388

300

Sawlogs

1000 m3

1 029

415

2 000

Sawnwood

1000 m3

998

1 172

3 500

Millwork

1000 m3

157

224

800

Pulp

1000 tons

1 260

1 745

2 500

Value

US$ million

1 126

1 661

2 600

Source: INFOR, 1998a

  According to the United States Department of Agriculture (USDA) Foreign Agricultural Service (FAS, 1998), Chile is increasingly likely to become more competitive in international markets. Chile has gained preferred market access to certain countries by participating in free trade agreements with MERCOSUR, Canada and Mexico. Chile is able to purchase high-technology equipment duty free that will continue the modernization of its industry. Segments of the industry are moving away from primary products into secondary, higher value items and additional clear sawnwood. This should help alleviate some of the recent downturns in regional and product markets. Chile's strong economic and fiscal policies should continue to attract foreign investment to modernize the industry. Finally, FAS (1998) indicates that Chile is increasing its spending on capital improvement and infrastructure projects that will increase the competitiveness of the industry.

Government and Trade Organizations Involved in Forest Products

  Institutions related to the forest sector in Chile are primarily based on private ownership of resources. Government agencies control legal regimes and subsidize activities where economics have not attracted private agents. The Ministry of Agriculture controls the main institutions related to the forest sector and includes the following: Corporación Nacional Forestal (CONAF), Servicio Agricola y Ganadero (SAG), and the Instituto de Desarrollo Agropecuario (INDAP). The government research institution (INFOR) is a private corporation linked to the Corporación de Fomento and to the Ministry of Agriculture.

 The Chilean Forest Service, CONAF, is responsible for forest law enforcement, forestry promotion, administration of state-owned wildland protected areas, and fire and pest control. The CONAF was created in 1973 and has played an important role in promoting afforestation and forestry in general.

  Forest activities involving sanitary monitoring of products and quarantine surveillance are performed by SAG. In addition, SAG issues hunting and fishing licenses. The

  INDAP facilitates access to capital and to technology for small rural landowners. The INDAP often works with marginal areas with small ownership. These marginal areas are typically forested.

  The Comisión Nacional del Medio Ambiente (CONAMA) was recently created to deal with all environmental problems and issues. The Law on Basis for the Environment was approved in 1998, and the regulations are currently under final review. Given this new legal background, CONAMA has become crucial in the authorization of large-scale industrial or forest management investments.

  To meet changes in environmental law, social preferences, and the production sector, government agencies related to the forests have been restructured. Figure 1 represents the new institutional design established in 1999.

Figure 1. State Agencies in Chilean Forestry: Proposed for 1999 (Veloso, 1999)

  ProChile, located in Santiago, is part of the Ministry of Foreign Affairs and promotes the export of all Chilean goods, including forest products. They represent Chile at international trade shows and assist companies in the development of export markets.

  The INFOR is the equivalent of the Forest Products Laboratory of the United States of America that conducts extensive research related to wood products, including economic and market studies. They publish economic data relating to the wood products industry and evaluate changing products and markets as they relate to forest products.

  There are a number of private associations related to forest products including the Lumber Industry Association (ASIMAD), Chilean Lumber Corporation (CORMA) and the Technology Research Corporation (INFEC). These organizations are involved in setting standards for the different market segments of the industry and conducting specific research in these areas.

Corporate Marketing Organization

  Personal interviews indicated that many medium to large companies have marketing groups that are headed by someone with an MBA or a degree in marketing or economics. However, no interview indicated that companies had individuals trained in forest products marketing. Results of the fax survey supported these findings whereby an MBA is the most common education of marketing personnel in larger companies. Also, engineers are often found in administrative positions and/or positions where they provide services that can be termed technical marketing. Figure 2 illustrates a representative marketing structure within larger firms.

  In most cases, smaller firms had no one trained in marketing and the owner, manager, and/or sales person were the same individual. Typically small firms do not have organized marketing departments. These firms tended to be order-takers, rather than market planners. Interviews indicated that most smaller firms were sole proprietorships, in which the owner was the production manager, log buyer, sales person and labourer when needed. Often these firms did not conduct market planning and did what was necessary to meet daily demands. A typical structure would be the owner selling directly to the small number of customers he/she serviced. As these firms grow along with the growth in the industry, one of the first positions needed will be someone to direct their marketing and sales activities.

Figure 2. Forest Products Marketing Organizational Structure: Large Firms

Existing Educational Programmes and Curricula

  Secondary sources and personal interviews indicated that there was no one organization whose primary function was advancing forest products marketing within Chile. The lead institutions at the state level include INFOR, Fundación Chile and Icare. The INFOR is the government agency in charge of conducting research in forestry and wood products, including marketing and economics. ProChile is a government body whose function is to promote Chile's products internationally. One of their focus areas is forest products. The leading universities within Chile that are teaching forestry/wood products include University of Chile, University of Concepción, University of Bío-Bío, Universidad Católica, University of Talca, Universidad de La Frontera, and University Austral de Valdivia.

  Only two organizations indicated that they are involved in forest products marketing. Fundación Chile is a co-sponsor of a major marketing conference held in Santiago every other year. The University of Chile introduces marketing concepts in their classes. Two other respondents indicated that their students can take traditional marketing classes in a business department, but they are not directly related to forest products marketing. The University of Concepción is thinking of introducing more forest products marketing into their curriculum. The University of Bío-Bío is in the initial planning stages of a graduate programme in Forest Products Marketing. They have the only faculty member trained in forest products marketing in the United States of America. The University of Chile in Santiago is also considering expanding their undergraduate programme to include more marketing courses.

  These results indicate that there is an infrastructure in which a programme can be developed with the current university system to provide undergraduate and graduate education.

Forest Products Marketing Education Needs and Availability

  To evaluate the forest products marketing training needs of Chile, a multi-phase study was conducted, as stated in the methodology section. The purpose of this portion of the research was to quantify the importance of a number of items as they relate to training methods and subject matter. The results from this section indicate the best methods of delivery for forest products marketing education and the subject areas most needed to be taught.

  Participants were asked to rate on a scale from one (not available) to five (very available) the availability of different sources of forest products marketing training. The items rated included educational materials, university programmes, continuing education, forest products marketing instructors, seminars and associations that could provide training.

  The most available method for training was seminars at a rating of 2.3, followed by educational material (1.9), associations (1.7), forest products marketing instructors (1.7), university programmes (1.6) and continuing education at (1.3). All of these items rated below average availability and indicate that there is little forest products marketing training being offered at this time in Chile. It should be noted that the population interviewed was composed of leaders in wood products education in Chile, so these results substantiate the need in these areas.

  Interviewees were asked to rate the availability of forest products marketing education to different individuals. The mean ratings for the availability of education to upper management personnel was rated at 1.6, followed by undergraduates (1.6), middle management (1.5), graduate students (1.5), government officials (1.4) and the labour force (1.2). Again, it can be noted that all mean responses were that forest products marketing education is not available or is of limited access to these individuals.

  Figure 3 summarizes participants' mean ratings of the effectiveness of various training methods. Personal visits and case studies were the highest rated training methods. Continuing education and short courses were also rated above 4. The lowest rated methods included trade journals, videos and the Internet. These results indicate that Chile's leaders in the industry believe that the best method remains personal interaction between an instructor and the student. In developing educational programming, educators will want to focus on those methods that bring the student into contact with the instructor and allow him to apply the techniques that are taught as in a case study approach.

Forest Products Marketing Educational Programming Needs

  To identify the educational programming (i.e. topic areas) that should be included in a forest products marketing curriculum, participants were asked to rate 30 topic areas on their importance within a forest products marketing programme. Also, they rated the current availability of the subject in Chile.

  In the United States of America, this method was used by Brackovich and Miller (1993) to identify sawmill needs in the Midwest and was later used by Hansen and Smith (1997) to identify forest products educational needs in Oregon and Virginia. Respondents rate a subject on a scale from 1 (not important) to 5 (very important) and simultaneously rate the availability of the subject on a similar scale. The difference between the two is calculated and then weighted by the mean of the importance of the subject. This method allows one to emphasize programme development in areas that are important and not currently available:

Educational Need = (Subject Importance - Subject Availability)*Subject Importance

  Subject areas were selected from previous studies and reviewed by all three parties in the research. They were pre-assigned to four major marketing/business areas: (1) Marketing factors; (2) Identifying markets; (3) Management issues; and (4) Business environment.

  Table 8 summarizes the mean importance ratings, availability ratings, educational gap, and the educational need score. Although 16 interviews were conducted, only 11 participants provided useable data for this question. Non-respondents stated that they were not qualified or were not aware of the availability of subject areas.

  The subject areas which were the highest rated in importance included product promotion (4.9), new product development (4.8), developing strategic partnerships (4.8), international markets (4.8) and identifying new markets (4.8). The lowest rated subject areas were social issues (3.6) and banking infrastructures (3.6). Respondents strongly indicated that new markets and new products were the most important factors for a forest products marketing education.

  The ratings on the availability of subject areas will provide information for the development of courses that are not currently being offered. Subjects with the highest ratings included banking infrastructure (4.1), developing business plans (3.6), communication infrastructure (3.6), motivating personnel (3.5) and basic economics (3.5). The least available subject areas included forestry related issues (2.1), green marketing (2.2), e-commerce (2.2) and conducting marketing research (2.2).

  The highest educational needs were calculated to be developing strategic partnerships (12.5), developing marketing plans (12.3), green marketing (11.8), product promotion (11.8) and new product development (11.6). These results indicate that a curriculum should include advanced courses in market planning and product development and promotion. The lowest rated educational needs were banking infrastructure (-1.8), communication infrastructure (1.6) and economics (2.0). This would support the personal interview comments that there are sufficient MBA courses available in Chile where standard business environment issues are taught.

  These results can assist organizations in Chile in developing undergraduate or graduate programmes in Forest Products Marketing. Table 9 suggests the curriculum that students could take in order to earn these degrees. These classes assume that the student already has taken the fundamental core courses in Mathematics, Science and Arts and is focusing on specific courses in forest products marketing. At the graduate level a student would take more advanced courses in the marketing concentration and fewer courses in the wood concentration area. It is assumed that the student at the graduate level would have a solid foundation in the forest products industry or would have to take undergraduate courses to make up for any deficiencies.

Table 8. Educational Need Assessment of Chile's Forest Products Marketing Education

Subject Area

Importance Rating

Availability

Rating

Educational

Gap

Educational

Need

 
   

Mean

Mean

(1-A)

(I-A)*I (rank)

Marketing Factors

 

Product promotion

4.9

2.5

2.4

11.8 (4)

Product distribution

4.6

2.5

2.1

10.1 (13)

Sales skills

4.7

2.5

2.2

10.4 (10)

Types of forest products

4.4

2.3

2.1

9.1 (17)

Pricing of products

4.2

2.4

1.8

7.9 (18)

Developing marketing plans

4.7

2.3

2.4

12.3 (2)

New product development

4.8

2.4

2.4

11.6 (5)

Forestry related issues

4.3

2.1

2.2

9.4 (15)

Identifying Markets

       

Green marketing

4.7

2.2

2.5

11.8 (3)

e-commerce

4.2

2.2

2.0

7.5 (19)

Non-wood forest products

4.0

2.4

1.6

7.2 (20)

Identifying new markets

4.8

2.6

2.2

10.6 (7)

Finding market information

4.6

2.5

2.1

10.2 (11)

Market information systems

4.6

2.6

2.0

9.2 (16)

Conducting marketing research

4.4

2.2

2.2

9.9 (14)

Product certification

4.7

2.6

2.1

10.4 (9)

International markets

4.8

2.7

2.1

10.1 (12)

Management

       

Strategic market planning

4.6

2.4

2.2

10.5 (8)

Developing strategic partnerships

4.8

2.3

2.5

12.5 (1)

Motivating personnel

3.9

3.5

0.4

2.6 (25)

Personnel management

3.9

3.5

0.4

2.6 (26)

Competitive positioning

4.6

2.3

2.3

11.1 (6)

Business Environment

       

Finance

3.8

3.4

0.4

2.5 (27)

Communication infrastructure

3.7

3.6

0.1

1.6 (29)

Basic economics

3.9

3.5

0.4

2.0 (28)

Developing business plans

4.0

3.6

0.4

3.1 (24)

Banking infrastructures

3.6

4.1

-0.5

-1.8 (30)

Environmental issues

4.1

3.2

0.9

4.6 (22)

Trade policy

4.4

3.3

1.1

5.9 (21)

Social issues

3.6

3.2

0.4

3.6 (23)

         

n=11

Table 9. Suggested Undergraduate Forest Products Marketing Curriculum

 

Course Title

Course

Description

Course Title

Course Description

Wood-based

 

Marketing/Management

 

Forest Industry

Studies

An overview of all forest products industries and how they relate to each other.

Forest Products Marketing

The basics of marketing as they apply to the forest products industry.

 

Sawnwood Manufacturing

How sawnwood is processed and manufactured into various products.

Wood Industry Management

Modern management techniques as they apply to the forest products industry.

General Forestry

An overview of forest practices and how they relate to the various products that are produced.

Computer Control Systems

Computer applications in the forest products industry.

Wood Anatomy and

Chemistry

The specific anatomical and chemical composition of wood. How wood properties affect manufacturing processes.

Marketing Research

The fundamentals of marketing research.

Wood Composite

Manufacturing

The fundamentals of the manufacture of plywood, OSB, MDF, particle board and other wood-based composites.

Marketing Concepts

The theory of marketing and the four Ps, product, price, promotion and distribution (place).

Wood-based Adhesive

Chemistry

How various bonding agents are used in composite manufacture.

Personal Selling

Selling skills.

Secondary Wood

Manufacturing

The products and markets that exist for wood beyond primary manufacturing.

Marketing Management

General marketing management. Strategic marketing concepts.

Wood Mechanical

Properties

The strength characteristics of wood and its behaviour in structural applications.

International Marketing

How to understand and enter international markets.

Wood Drying

The understanding of moisture in wood and proper drying applications.

   

Wood Preservation

The application of chemical preservatives to increase the lifespan of wood.

   

Obstacles to Forest Products Marketing Education

  Results from personal interviews indicated that there are several barriers to participation in forest products marketing education. For small firms, the major barriers are cost and time. The majority of larger forest products corporate headquarters are located between the capital city of Santiago in the north and Concepción to its south. Training in the form of MBA courses or marketing seminars is generally offered in these two regions. Attendance is limited by time and cost for small firms not located in proximity to these areas. Respondents indicated that to reach the smaller manufacturers, training would have to be delivered at locations closer to the small firms.

  Another major obstacle is that there is no university that offers forest products marketing in Chile at this time. Two universities include business programmes or an optional marketing course, but nothing specifically in forest products marketing. Most training occurs in traditional marketing or economics. Fundación Chile offers a seminar every other year on marketing products from Chile, but this seminar traditionally has been attended only by individuals from major corporations. Finally, a potential obstacle exists in the form of a need for some type of recognition or certification for people who have successfully participated in intermediate length training courses.

Non-wood Forest Products

  Increasingly, forest product producing regions are looking for methods to increase the value from their forest, while not increasing the harvest of timber. Many countries have developed active programmes in the harvest of non-wood forest products. These products include medicinal, craft items and foodstuffs. Examples include herbs, pinecones, pine boughs, maple syrup, selected types of barks, flowers, ferns and mushrooms - all of which may have economic value. In certain areas recreation, bird watching and hunting are activities in which local landowners can supplement income from their forest.

  Compared to the solid wood industry, the non-wood forest product segment is heterogeneous and the availability of information is scarce, if non-existent. All respondents during personal interviews indicated that there is very little activity in this area in Chile. The primary reason given was that since most of Chile's commercial forests are plantation grown, there is little biodiversity present. Some respondents indicated that hiking and other recreational activities might be a future source of income, but did not think at this time that it was important. These results were confirmed with the quantitative evaluation of educational needs, with education in non-wood forest products rating twentieth in need.

  The results indicate that some education is needed regarding the types of non-wood forest products that may be harvested and to create awareness of the multiple sources of income from indigenous forests. Respondents often commented on the need to diversify and add value to Chilean forest products. This trend could lead to increased awareness of opportunities for non-wood forest products and will create a need for market information. The need for this information will be increased if profits from the sale of non-wood forest products are to accrue in rural areas where they are collected.

Estimated Demand for Forest Products Marketing Education

  To estimate the current forest products training needs of the Chilean industry, quantitative data from secondary sources, along with qualitative findings during the personal interviews, were utilized. However, since there is a lack of general information on the number of individuals involved in marketing at the wide range of companies, these estimates are to be used as preliminary data. Table 10 summarizes the major primary manufacturing segments and an estimation of their potential for forest products marketing education.

Table 10. Number of Companies by Market Segment and Estimated
Current Demand for

Forest Products Marketing Education

Type of Company

Number of
companies

Estimated need for forest products
marketing education

(Number of people)

     

Sawmills (total)

1 034

 

Very large

17

51

Large

22

66

Medium

31

62

Small

42

42

Very small

922

250

     

Wood Composites (total)

13

 

Hardboard

1

4

MDF

3

12

Particle board

4

16

Plywood

5

20

     

Paper/Pulp

9

 

Mechanical pulp

2

8

Chemical pulp

5

20

Newsprint

2

8

     

Secondary Manufacturing

Total current need

 

100

655

Source: Ballerini 2000

  The results indicate a current training opportunity for over 600 individuals and over 1 000 organizations that could benefit from forest products marketing education. It is believed that as the segment moves towards secondary manufacturing and new international markets, the need for forest products marketing education will grow. Recent growth in the wood-based composite industry and export markets also indicates a continued need for forest products marketing personnel.

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