N. ST. DUMITRESCU AND A. HARAP
Experience in Romania
THE accelerated rate of industrialization over the last few decades has created a demand for ever increasing quantities of wood products. The consumption of wood products is based on a raw material which, although practically inexhaustible, does not at present show annual growth that, coupled with long regeneration periods, can keep pace with the rate of increase in the national product.
The FAO/ECE, study on the consumption, production and marketing of timber in Europe between 1950 and 1975 (European timber trends and prospects: a new appraisal 1950-1975) has shown that, in only 15 years between 1960-75, the per caput consumption of timber may increase from 0.55 cubic meters in 1960 to 0.75 cubic meters in 1975. Even with this increase, which includes a rise of approximately 200 percent in the consumption of pulp products and 250 percent in that of wood-based panels, the index of the ratio between timber consumption and gross national product per head is as follows: 1950 = 100, 1960 = 84, 1975 = 64.
The implication of these figures is that in the future the highly industrialized countries will constitute a constantly expanding market for wood products. This continually increasing demand for wood cannot be met by overexploiting the forest; the answer to the problem lies in increasing the productivity and quality of the forest, extending the range of woody matter that is acceptable as raw material, introducing the entire volume of wood that is produced in the forest into the economic system, and integrating the intensive and more efficient processing of wood into modern industrial units.
The development of science and techniques for processing material resources has yielded results in the field of forest economy as well as in others. Wood-based products are now obtained by means of automatic and chemical technological processes. The emphasis upon the social division of labor characteristic of industrialization has made itself felt in the forest economy by the appearance of new fields of production (particle board, fibreboard, semichemical pulps, etc.).
In these new fields of production cam be seen a rapid accumulation of experience which is aiding the process of perfecting the techniques involved. As a result, the range of raw material that is acceptable for the new products has been extended.
The consequence of these discoveries and of general scientific development is that the structure of the demand for timber has undergone a substantial change in Europe. The new technological processes now guarantee a high economic efficiency in the utilization of billets, smallwood and hardwoods. In 1960, pulp and wood-based panels consumed approximately 40 percent of the total volume of woody raw material, and their contribution to the total value of the goods produced from woody matter amounted to approximately 60 percent. This economic efficiency, derived from the new technological processes, has changed the structure of timber consumption to such an extent that the ratio between logs and billets, which was 65:35 percent (109: 60 million cubic meters) in 1950, will be 50: 50 percent (170: 170 million cubic meters) by 1975.
This general trend of development is also making itself felt in the wood-processing industry, and is characterized by the integration of production, the extension of mass production, and the use of now plant and technological processes, which are creating new relationships between production and science.
The integration of forest production into wood-processing complexes makes it possible to achieve total conversion and more efficient realization of the value of the raw material in specialized factories which operate in close co-operation with each other, enabling a wide range of products to be manufactured. Higher grade logs are converted to plywood and decorative veneers, and the remainder of the roundwood into sawn timber. The waste products resulting from this primary conversion, together with fuelwood and smallwood, are converted to particle board and fibreboard. A certain proportion of the sawn timber, plywoods, veneers and panels produced are used, in the respective complexes, for the manufacture of solid and bentwood furniture, doors, windows, flooring, packaging, and other finished wood products; the remainder are delivered as they are, as semimanufactured products, to other consumers.
In these complexes, a high degree of efficiency is achieved in the processing of wood.
Inferior assortments, such as the billets obtained from tending operations, split fuelwood, and the various low-grade hardwoods, are now finding improved utilization in the manufacture of wood-based panels.
MR. DUMITRESCU and DR. HARAP are deputy directors at the Forest Research Institute, Bucharest, Romania.
Plant producing sheets of fibreboard with, decorative overlay.
The organization of an entire complex made up of component factories creates conditions conducive to obtaining a high level of technology, which in practice means the installation of modern equipment, with mechanized and partly automated production lines, mechanical and electrical laboratories and workshops, and thermal power plant, which are impossible to provide in individual factories and ensure products of improved quality.
The high technological level of the complexes means that more intensive training is necessary for the teams of workmen, technicians, engineers and economists, and, at the same time, helps to make them more skilled.
The high economic efficiency of timber conversion in these complexes is also illustrated by the higher values that are obtained for the other factors and indices relating to efficiency, investment profitability, labor productivity and so on.
Apart from these technological and economic considerations, the concentration of production in complexes is also justified by socioeconomic factors. The size of the complexes situated in regions or localities where the level of industrial development is low and there is spare manpower available contributes to the economic development of the region and ensures improved working and living conditions.
If the forest economy of countries with considerable natural resources is considered in this context, it can be said with certainty that the concentration of wood-processing in industrial complexes has become a necessary objective.
In the face of this present-day requirement, the conversion of wood has so far been characterized by a haphazard process of development and, in the majority of countries outside Europe, by a reduced accessibility of their raw material resources.
The primary requirement for industrial complexes which process large quantities of woody matter is that they should be established on a permanent and reliable basis, which means that; preliminary fundamental studies are essential to their development.
These studies must tie aimed at solving the problems related to the range of raw material, the production range of the complex, its location, and the technical and economic indices of the investment efficiency.
The availability and type of the basic raw material is the first determining factor in establishing the production range of an industrial complex, and its location. This is why the immediate task imposed by this new trend of development is the identification of the existing forest resources and their production potential.
It is only by correct management of the forest that the interests of rational forest cultivation can be made compatible with the economic and technical interests of more efficient exploitation and realization of the value of the timber.
The orographic conditions of the forested areas can constitute a determining factor in demarcating the limits of a source of raw material. If all the forests in a region from which all the harvested woody material is transported to the same location are grouped tinder a common administration, this creates the possibility of establishing permanent management units, each of which judiciously plans the forest production of the respective unit, in accordance with the requirements of the general economy. This system of management by areas of natural flow establishes an ordered. structure for the cultivation, regeneration and exploitation of the forest, taking as its guiding principle continuity of production and a sustained yield, or the harvesting every year from an individual unit of equal quantities of wood.
In the European countries, where approximately 97 percent of the forests are accessible, the only possible means of increasing their resources lie in increasing productivity, reducing logging wastes, and using fuelwood as timber; however, in underdeveloped countries which have considerable timber resources that have not yet been exploited, an organization of the kind described above is quite feasible.
In order to ensure the supply of necessary raw material to an industrial complex, the following factors must first be established by a preliminary technical and economic study the forest areas which will provide this raw material, the assortment range of the wood produced, the organization of the fellings, and investments in transport installations, as well as the annual felling quotas by species, assortments and dimensions.
The second essential problem is to establish the production range of the complex, which is determined for the most part by the raw material that is available and by consumer demand.
The volume of available wood, together with the range of assortments by sizes and quality of this volume, generally determines the production range and capacity of wood-processing complexes, and also the choice of the basic equipment best suited to the characteristics of the raw material.
Depending upon these factors, the production range of the complex is established: for plywood, furniture, particle board and fibreboard factories, the optimum capacities are adopted; and for hardwood and softwood sawmills, decorative veneer, door, window and flooring factories, the capacities that are imposed by the respective production lines.
Optimum capacities and rated production line capacities in Romania for example, have been studied by the Institute of Forest Research and the Institute of Planning; the results obtained are listed in Table 1.
TABLE 1. - OPTIMUM CAPACITIES AND RATED PRODUCTION LINE CAPACITIES IN ROMANIA
|
Serial number |
Product |
Unit of measurement |
Optimum capacity |
Production line capacity |
|
1 |
Plywood |
m³/year |
18 000 |
- |
|
2 |
Solid furniture |
pieces/year |
15-20 000 |
- |
|
3 |
Bentwood furniture |
chairs |
600 000 |
- |
|
4 |
Particle board |
t/year |
18 000 |
- |
|
5 |
Fibreboard |
t/year |
35 000 |
- |
|
6 |
Production line for sawn softwoods (with frame saws) |
m³ logs/year |
- |
56 000 |
|
7 |
Production line for sawn hardwoods (with band saws) |
m³ logs/year |
- |
32 000 |
|
8 |
Decorative veneers (capacity per slicing machine) |
m²/year |
- |
2 000 000 |
|
9 |
Doors |
m²/year |
- |
300 000 |
|
10 |
Windows |
m²/year |
- |
200 000 |
|
11 |
Normal flooring |
m²/year |
- |
120 000 |
|
12 |
Lamellar flooring |
m²/year |
|
100 000 |
In deciding upon the location of a complex, which is the third essential problem, a major factor lies in the possibility of reaching an economic compromise between the industrial objective and the available road and rail networks.
The nature and configuration of the terrain are also determining factors in deciding upon a site.
On the basis of these factors, several possible variations of production range and location are considered for the complex. For each variation studied, technical and economic indexes are established for the following:
1. cost of raw material;
2. value of industrial investment;
3. value of investment required for providing utilities (water, steam, power, sewerage, etc.);
4. economic indexes relating to investment efficiency.
The economic efficiency of investments in complexes is determined by:
1. investment outlay required to achieve a certain level of production by value or quantity of product;
2. profitability of the production for which investment is intended.
The first criterion is a function of the investment efficiency indices and the specific investment index.
The second criterion is generally a function of the following indices: unit cost price, profitability of production, and labor productivity.
The profitability index is expressed as a percentage, and forms the basis for calculating the period of time required to recover the investment.
In addition to the criteria mentioned above, and the corresponding indices for evaluating the economic efficiency of an investment, the calculations must also include the wood processing and value realization indices and the determination of the economic efficiency of the investment in terms of international exchange.
The processing index is expressed, as a percentage, by the ratio between the quantity of -woody matter that is incorporated in the final products and the volume of wood consumed in the manufacturing process.
The index of the realization of the value of the raw material is expressed, in lei/cubic meters,¹ by the ratio between, the total value of the products at the selling price and the total volume of wood consumed in the manufacturing process.
¹ 100 lei = U.S.$16.65.
When the products are intended for export, an analysis is made of the net annual income obtained from them in the foreign currencies concerned, and the current rate of' exchange of these currencies into the national currency.
To make a fair evaluation of the economic efficiency of an investment all the indices mentioned are used in most cases, their values reflecting the various aspects of the efficiency which must be born in mind in determining the investment outlay required to establish an industrial complex.
The values obtained for these technical and economic investment indices in any given variation are compared with the corresponding values obtained for other possible variations, with the indices for similar investments that are either planned or already carried out, and with the indices achieved in existing enterprises using advanced techniques. The results of these comparisons are used as a basis for judging whether it will be possible to realize the investment with the plan already drawn up and in the variation proposed.
Experience in Romania has confirmed that this method. of approach is the correct one.
Between the two world wars, the Romanian wood-processing industry was characterized by a preponderance of sawnwood manufacture (Table 2).
TABLE 2. - PERCENTAGE OF SAWNWOOD MANUFACTURE IN ROMANIA, 1919 TO 1939
|
Index |
Sawmills in the wood-processing industry between the two world wars |
|
Percent |
|
|
Invested capital |
82 |
|
Plant installed |
88 |
|
Labor |
85 |
|
Value of industrial production |
88 |
A major factor contributing to this lack of balance in the development of the wood industry was undoubtedly the fragmentation of forest ownership into more than 500,000 production units without adequate access roads.
Under these conditions, the concentration of production in industrial complexes has taken a historic period of almost two decades.
The process of concentrating the forested areas and forest management was finally completed in 1955, and for the first time made it possible to take an overall look at the conditions and production potential of the forests.
Investment policy over the last 15 years reflects this trend of development; to start with, priority was given to problems of exploitation, but in the second stage the emphasis was placed on the problem of more efficient processing of wood. The distribution. and shift of emphasis in investments are shown in Table 3.
TABLE 3. - DISTRIBUTION AND SHIFT OF EMPHASIS IN INVESTMENTS
|
|
Unit |
1951-55 |
1956-59 |
1060-64 |
|
Exploitation |
|
|
|
|
|
Investments |
million lei |
1 510 |
1 503 |
2 749 |
|
Annual aver-age |
million lei |
302 |
376 |
550 |
|
Change |
percent |
100 |
124 |
182 |
|
Processing |
|
|
|
|
|
Investments |
million lei |
415 |
824 |
2 815 |
|
Annual average |
million lei |
83 |
207 |
563 |
|
Change |
percent |
100 |
250 |
677 |
The figures in this table show that there was little change in the sums invested in the field of exploitation (E) between 1951 and 1959, but that they subsequently reached 182 percent. In the field of processing (P), investments were relatively, small during the period of the first five-year plan, but were doubled during the second, and increased by a factor of six in the last six years.
The change in the ratio between the investments assigned to these two fields has been as follows (Table 4).
TABLE 4. - CHANGE IN THE RATION BETWEEN THE INVESTMENTS
|
|
1951-55 |
1056-50 |
1960-64 |
|
E: P ratio |
3.6: 1 |
1.8: 1 |
0.9: 1 |
The data given in these tables show that, during the period of the two five-year plans, larger investments were assigned to the field of exploitation, in order to increase forest production capacity, whereas during the period 1960-64 the sums assigned to processing were increased, with a view to extending the processing capacity and perfecting methods and processes for efficient realization of the value of the wood.
This increase in the investments made in developing the wood-processing industry has meant that in the period 1960-64 the funds assigned to this purpose represented more than 50 percent of the total, whereas during 1950-55 they represented only 22 percent.
The technical and economic indices that have been mentioned were used as a basis for establishing the production ranges of the wood-processing complexes that have been built in Romania, as shown in Table 5. As a result of the construction of these wood-processing complexes, there has been a substantial increase in the production of the forest economy.
Table 6 shows the distribution of this increase in production over the principal sectors of the wood-processing industry in the period 1960-64, compared with the figures for 1959.
Many of the products listed in Table 6 have been manufactured for the first time in Romania. Examples are external (water-resistant) plywoods for coffering, naval constructions, etc., three-layer particle board made of beech and softwood species, structured particle board, beech hardboard, insulation and bituminous board, cellular board with a spiral veneer core, densified laminated wood, fibreboard made of plasticized and enameled wood, Lamelin type veneers, finished doors and windows, matches packed in cardboard boxes, etc.
TABLE 5. - PRODUCTION RANGES OF COMPLEXES IN OPERATION
TABLE 6. - DISTRIBUTION OF THE PRODUCTION OF THE TIMBER INDUSTRY OVER THE PRINCIPAL ASSORTMENTS BETWEEN 1959 AND 1964 (1959 = 100)
|
|
1962 |
1964 |
|
Total sawnwood |
119 |
127 |
|
Sawn beechwood |
148 |
185 |
|
Veneers |
272 |
275 |
|
Beech plywood |
244 |
368 |
|
Particle board |
393 |
732 |
|
Fibreboard |
100 |
504 |
|
Doors and windows |
222 |
309 |
|
Furniture |
231 |
292 |
|
Flooring |
192 |
202 |
|
Beechwood packing cases |
225 |
229 |
NOTE: The main factors that can be deduced from this table are as follows:1. particularly intensive utilization of beechwood during this period for the production of sawn timber, plywood, particle board fibreboard, flooring and packaging;
2. creation and development of particle board and fibreboard production;
3. particularly rapid rate of increase in the production of furniture and doors and windows.
The principle of integrating the wood-processing industry into horizontal and vertical industrial complexes has had a favorable effect upon our entire national economy.
In the first place, it has ensured more efficient utilization of our timber resources. In these complexes the technological flow has made it possible for the waste products resulting from the primary conversion to become the raw material for other factories within the complex. In this way, values of 70 to 75 percent have been obtained for the wood-processing index in the complexes which use beechwood, and 80 to 85 percent in those which use softwoods as their raw material. In the case of single-product factories, the value of this index is 67 percent in softwood sawmills, 50 to 58 percent in oak and beech sawmills, and 50 percent for plywoods.
Apart from industrial waste products, certain low-grade assortments or small wood from the forest - such as billets harvested during tending operations, split fuelwood and brushwood - are also being utilized more efficiently in particle board and fibreboard factories. This result is reflected in the rate of increase in the utilization of timber in the case of species that had not been fully exploited in the past.
In this way, the percentage of the total volume of wood used for industrial purposes has increased every year, reaching more than 71 percent in 1965, compared with 49.1 percent in 1951 (Table 7).
Increasingly large values have also been obtained by modifying the specific gravity of the principal assortments toward more valuable products, In this way, a considerable rise, in the production of peeler wood has been achieved, Which increased from approximately 40,000 cubic meters in 1950 to more than 750,000 cubic meters in 1965.
There has been a similar change in the species structure of the volume of wood that is put to profitable use, bringing it into line with our available forest resources.
The high economic efficiency of the conversion of wood within these complexes is also the result of the higher values that are obtained for the index of the realization of the value of the raw material.
Thus, whereas in single-product beechwood sawmills the value of this index, expressed as the sums in lei that are obtained. as profit per lea value of the raw material, does not exceed 1.8, and in plywood factories 2.5, in the wood-processing complexes this index reaches values of between 3 and 6 lei.
The value of the products obtained from I cubic meter of wood processed within these complexes varies between 650 lei (U.S.$108) and 1,030 lei ($171). As a comparison, it can be quoted that, during 1959, the mean value of the products obtained from I cubic meter of wood (timber plus fuelwood) throughout the entire country was only 196 lei ($32.5).
The investment efficiency index (lei invested per leu produced) varied between 1.8 for fibreboard and 0.65 for furniture factories.
The importance of integration into these new wood-processing units becomes still more evident if it is mentioned that the production norms set for 1964 were achieved in the units in the following proportions:
|
|
Percent |
|
Plywood |
83 |
|
Veneer |
60 |
|
Doors and windows |
53 |
|
Solid furniture |
30 |
|
Bentwood furniture |
83 |
|
Particle board |
100 |
|
Fibreboard |
100 |
As a result of the new investments made during the period 1960-64, the mean rate of increase in industrial production for the processing sector of the wood industry was 1,15 percent (Table 8).
This rapid rate of development of the wood-processing industry has also changed the structure of the value of the overall production achieved between 1959 and 1964 in the two sectors, forest exploitation and the wood-processing industry.
Expressed as a percentage of the total of the overall production of industry in Romania, the volume of the wood industry increased from 4.9 percent in 1961 to 5.3 percent in 1964.
In addition, the productivity per man achieved in the entire wood industry was more than 36 percent higher in 1964 than in 1959.
This increase in productivity can be broken down as follows between the different fields of activity:
|
|
Percent |
|
1. Sawmills and packaging factories |
15.7 |
|
2. Factories producing high-grade send-manufactured products and finished products |
56.6 |
TABLE 7. - VOLUME OF WOOD USED FOR INDUSTRIAL PURPOSES AS A PERCENTAGE OF THE TOTAL VOLUME OF WOOD HARVESTED
|
|
1951 |
1959 |
1962 |
1965 |
|
Percent |
||||
|
TOTAL |
|
|
|
|
|
of which: |
49.1 |
58.6 |
63.7 |
71.2 |
|
Beechwood |
27.2 |
44.7 |
54.1 |
63.7 |
As far as the cost price is concerned, the enterprises belonging to the Ministry of Forest Economy achieved a mean reduction of 18.7 percent in its value in 1964 as compared with 1959, and there has been a spectacular rise in the profitability of the forest economy.
TABLE 8. - CHANGE IN STRUCTURE OF VALUE OF OVERALL PRODUCTION
|
|
1959 |
1964 |
|
Percent |
||
|
Forest exploitation and extraction |
39.1 |
25.0 |
|
Wood -processing industry |
60.9 |
75.0 |
|
TOTAL |
100.0 |
100.0 |
The development of the wood -processing industry, and the resultant extension of the range of its products, has also been the reason for the increase in our exports, which were approximately 2.4 times higher in 1965 than in 1959. Romania now occupies first place in Europe among the countries which export sawn hardwoods, 'and an important place among those which export plywood, particle board, fibreboard, furniture, packaging and flooring.
This increase in exports and, above all, the high proportion of highly industrialized products among the exported goods, is the natural consequence of the success that has been achieved by the wood-processing industry.
One of the factors contributing to this success has been the continual increase in the number of colleges for the training of specialized staff, and, the concomitant development of scientific research and planning activities.
As a result of the establishment of these complexes within a relatively short period of time, production has been redistributed over the area of the country in accordance with the principles of the rational distribution of manpower under conditions Where enterprises are being furnished with the most advanced techniques.
The forest economy has made its own valuable and essential contribution to the task of helping the country to advance along the path of progress.
