E. BRYAN LATHAN
Commissioner, Forestry Commission, United Kingdom
Paper delivered at the Fifth World Forestry Congress.
THE sale and utilization of wood products is not, as we all know, the end-all of forests and forestry. Forests are a necessity to mankind for many reasons, among others to prevent Boil erosion, to regulate rainfall, to provide shelterbelts, and not the least because they provide satisfaction to man's sense of beauty and well-being, Nevertheless, in our age, when economics play such a prominent part in all affairs, forests and forestry services are expected in many quarters to pay their way. Forestry budgets find themselves continually reviewed by government auditors. Hence the successful sale and utilization of forest products becomes one of the primary tasks in forest management.
I feel I should start with some definition of the term forest products " from my point of view. For the purposes of this paper I am taking them to be sawmill logs and veneer logs, hardboard, softboard, chipboard, pulpwood (whether mechanical, sulphite or sulphate), pitwood and other mining timbers, timber for fencing and general agricultural purposes. Other forest products which stand apart from the contents of the actual tree trunk, such as fruit, nuts, oils, etc., I must leave to their respective experts. Your committee gave me a very wide brief and, in order to reduce the subject to manageable proportions in one paper, I propose to deal only briefly with softwood species, which mostly have an established market, then go on to the marketing of hardwoods, which is a much more complicated matter particularly in reference to tropical species, and finally to examine the vast market which includes inter alia plywood, hardboard, softboard, chipboard and pulp.
Softwood species are generally clearly appreciated and established from a market point of view. Compared with hardwoods, softwood species are comparatively few, the great softwood forests of the world are well known and most of them have been fairly accurately cruised. In fact, quite a large proportion of the world's softwood output is now being obtained from regenerated forests or plantations. Western hemlock from British Columbia and paraña pine from Brazil are among the last softwoods; to reach the international market, although China red pine (Pinus koraiensis), which has already reached London in small quantities, may yet prove a worthwhile newcomer.
Two problems present themselves to large-scale softwood producers. One, the question of integration of all their wood products, and two, the successful marketing of plantation woods and exotica, i.e., softwoods which are being grown in territories other than their original habitat. With regard to the first problem, a number of softwood producing countries have advanced far along the road to complete consumption of the standing tree. Notable examples are the United States of America, Canada and Sweden. The latter country depends upon forest products to maintain a very large part of its national economy, and there large integrated enterprises covering sawn deals, battens and board, hardboard, softboard and pulp increasingly hold the field. In this sphere it is safe to say that the problems of successful marketing are in the hands of commercial experts who well understand their business both to hold the markets they have already won and to continue their expansion.
Our second heading offers more complex problems. The exotic or plantation grown softwood has to find a new market, or in some cases to break into a market at the expense of oversea imports. The exotic softwood may show different qualities from the same tree grown in the original habitat, and there is a great need for forest research work on these problems. Such problems face the United Kingdom where, apart from the considerable activity of private woodland owners, the Forestry Commission has 1,250,000 acres (500,000 hectares) of woodlands, mostly new softwood plantations. The Forest Products Research Laboratory at Princes Risborough, Buckinghamshire, undertakes for the Commission a well-conceived program of research.
It is right here to pay a tribute to the work of forest research laboratories all over the world, and to acknowledge the stimulation they have received from their respective governments. Notable success in the establishment of markets for exotic softwoods has been achieved in South Africa, Australia and New Zealand.
But it is in promoting the utilization of hardwood species that forest products research laboratories have probably their largest parts to play. They can assist in appraising the market values of new species by furnishing accurate particulars of their scientific structure, texture and working qualities. They can also find new ways of using new species by testing them against the special requirements of different consumers. For instance, timbers which are not suitable for lumber have been known to produce excellent veneers. A typical example here is Gabon mahogany. Other timbers have been found to be acid resisting in connection with the use of chemicals. I must point out, however, that oak was found to be the best timber for the making of casks to store wine long before the days of forest products research laboratories!
There must, however, be close co-operation between forest products research laboratories and commercial interests if research is to bring its full value and be of adequate use to the community. Quite frankly, the history of the introduction of new woods to international markets cannot be said to be entirely due to scientific research. In fact in many cases it would seem to be almost a matter of accident or the result of great historical happenings outside the scope of ordinary commerce.
The great expansion of lumber production in the United States of America in the latter half of the nineteenth century was brought about by the enormous demand of the people for a material which would provide them with homes and furniture at short notice as they moved steadily westward from the Atlantic seaboard. Species after species were introduced into the market as their working qualities were found to fit the ever-growing demand. The vast United States home production in due course spilt over into the international consuming markets. On another continent, it is very doubtful if the great expansion of West African timbers, which tend to displace United States hardwoods in Western Europe, would have taken place or at any rate so quickly without the occurrence of the second world war and its consequent disturbances of markets and currencies. This great expansion of timber production in the West African territories and its success in gaining and holding markets will undoubtedly repay the study of economic experts. The original impetus certainly came from the fact that large consuming markets found themselves suddenly cut off from sources of supply to which they had been accustomed for several generations. Without this stimulant it is by no means certain that markets would have been found or at any rate so speedily for such a number of West African species in a comparatively short space of time. Ramin is another example of a wood that was hardly commercially known before the second world war, and now has attained considerable markets, particularly in the United Kingdom and Australia.
The brief outline above of what happened in West Africa opens up a very large question as to whether one day a similar shift in world trade, not on that occasion we must hope arising out of a war, will ever perform the same service for the vast hardwood forests of South America, particularly in the Amazon and Orinoco basins. It almost looks as if, in many cases, hardwood timbers, apart from the use of research in market techniques, must await their turn for a suitable concatenation of circumstances before they can make their way to international markets. Freights, costs of extraction, manufacturing costs, royalties, etc., can vary so enormously in different parts of the globe. For instance, the mahoganies of West and East Africa are largely similar in quality but, as far as the United Kingdom market is concerned, the latter has to face the disability of a much longer ocean journey.
Again, timbers may have a good local market but their hold on international markets may be precarious. An example of this was clearly seen in the United Kingdom following immediately upon the cessation of the second world war. Here, owing to currency and other difficulties, the use of timber was strictly controlled by government licence down to the year 1953. However, in 1946 the Board of Trade produced a scheme known as Hardwood Overseas Procurement Order Part III, under which private enterprise was permitted to import and sell freely hardwood timbers from a number of specified territories. In the peak year, no less than 350 species of hardwoods were brought into the United Kingdom and readily consumed. Such hardwoods as freijo, jequitiba and louro vermelho from Brazil; rauli, laurel and coigue from Chile; amarillo, fernan sanchez and roble from Ecuador; and chan, katon and haldu from Siam temporarily found a remunerative market. When, however, the British Government once more permitted the free consumption of softwoods in 1951, many of these woods were almost immediately driven off the market. Of the 350 hardwood timbers above mentioned, it is doubtful if even half have a secure place in the timber consumption market of the United Kingdom today.
This leads me to the vital question as to how governments and forestry departments can, with the aid of forest product research laboratories, help their timber-producing industries. One way is by enabling the qualities of known hardwoods to be more closely investigated so that particular timbers move higher up the list of successful utilization. An outstanding example of a timber that has so raised its status is ramin. Again it is noticeable that quite a lot of forest research work has been done in the consuming countries as well as in the producing countries. So we must assume that the consumer for his part is continually asking questions about the quality and suitability of various timber species.
It almost looks as if the successful introduction of new species of hardwood into the international market proves to have been largely a matter of individual enterprise, seizing a favorable moment to give a much wider market to a species of timber that has traditionally had a local use in the past. The evidence of a deliberate market technique having produced an immediate result in widening the market for a given timber is so far very scant. Once a timber has reached international status there is no doubt that governments can help or mar its chances of survival. By raising royalties to excessive levels or placing inordinate export duties on a temporary successful timber, there is always the risk of killing the goose that lays the golden egg.
We now come to another aspect of hardwood marketing apart from the great international markets of the world. I refer to the great opportunity for marketing timbers locally in the underdeveloped parts of Africa, Asia and South America. In many cases large populations with low standards of living exist in the neighborhood of great forest territories, upon which the local inhabitants make at the present moment very few demands. For instance, the last annual statistics show the following wide variation of consumption of sawn wood in cubic meters per 1,000 population, viz: Europe, 155; U.S.S.R., 390; North America, 515; Africa, 15 and Asia, 35. These figures speak for themselves. Both fortunately and inevitably, the local demand for timber will rise with the standard of living, and hence we must expect much larger local sales. Carefully balanced forest products research studies are needed, however, to determine which timbers will have the greatest value in their home territories and which will continue to be the main producers of revenue through the export trade. For instance, many hardwoods find a ready local use in Africa owing to their insect resisting properties which at the moment have no export value because of their hardness and weight. Already considerable forest research work is being done on a number of territories in Africa and Asia to establish these facts, but more is needed.
An outstanding example is the research work done in Malaya, where the forester is often faced with the problem as to which of several hundred different species of hardwoods he will choose to encourage and which he will suppress. The first step taken in Malaya was to divide the hardwoods into three groups, namely heavy, medium and light. Almost immediately it was decided to keep very few heavy hardwoods in the forest because they required at least 150 years to reach maturity, and under present circumstances their markets are uncertain. On the other hand, it was found that a number of commercially grown medium hardwoods such as keruing could be successfully impregnated with preservatives, and therefore would serve the same purpose for railway sleepers and similar uses. An enormous amount of work had still to be done making tests as to which were the most desirable medium and light hardwoods to encourage in the forest stands. Seeing that durability could be compensated for by ease of impregnation, it was agreed that two of the most important characteristics required in a commercial timber were the ability to " stay put " without disturbance or distortion, and that in these days of mass production it could be easily worked by machine tools. With regard to soft hardwoods, it was also considered that those liable to insect attack should be eliminated as far as possible. It can be agreed that modern insecticides have done much to suppress this risk, but it has to be admitted that these are expensive processes and add to the cost of production. So in Malaya we have a typical example of where foresters have faced up to the problem as to what they should grow in their forests from the point of view of its ultimate market value.
An important factor in the successful marketing of new species is the establishment and maintenance of practicable grading rules. Outstanding examples of success in this direction are the marketing of both ramin and Danish beech. Two main groups of lumber grading now hold the field, i.e., the system based upon the theory of the production of a maximum number of ".clear cuttings" from any given board, and secondly the so-called " appearance systems " which base their grading on the number of defects allowed to appear in a given sized board. The " clear cuttings " system was originated by lumber producers in the United States, where it became very popular and appears to satisfy the consumer. On the other hand, the United Kingdom market has not taken to it so kindly, and this may well be one of the reasons why West African timbers continue to hold their own there. These latter timbers are still largely graded on the " appearance system " and many consumers feel that this gives them a greater opportunity to make the most economical use of the board when they re-saw it for its ultimate end-use. Stress grading, again introduced in North America, is a newcomer which endeavors to grade on a strength basis, so that the stresses which the given piece of constructional timber can stand may be accurately gauged. If timber is to hold its own for constructional purposes against steel and reinforced concrete, much more will have to be done to expand the production and marketing of stress graded timber, particularly among softwoods.
In addition, foresters themselves have a great influence on the profitable utilization of their timbers by the methods of forestry which they choose to practice, whether by means of 100-year rotations, felling cycles or other forestry policies. Again it must be emphasized that for the successful continuing marketing of timber, settled forest policies must be practiced, otherwise the large capital Bums for Betting up sawmills, plywood, hardboard, chipboard factories and paper mills will not be attracted to tropical territories. At the present moment, it is an unfortunate necessity that compared with older timber producing industries in Europe, the United States of America and Canada, an enormous proportion of the total tree is lost either by being left in the tropical forest or as sawmill waste. The problem here is to provide an industrial technique and the capital for producing such end products as hardboard, chipboard and pulp. Here the Forestry and Forest Products Division of the Food and Agriculture Organization of the United Nations is playing its part by carrying out a number of studies relating to the possibility of small-sized plants for converting tropical hardwood waste products into boards and pulp.
This leads us to the marketing problems of such forest products as plywood, hardboard, softboard, chipboard and pulp. Again we have to record an almost general story of markets very tentatively built up from small experimental beginnings. It is a historical fact that from the days of Julius Caesar to the end of the nineteenth century there were no basic changes in the methods by which wood was used for the benefit of the consumer. New timbers reached the market, new tools and machinery were invented, but still wood was used in the same basic traditional manner. The dikes were breached by the invention of peeling and the wholesale manufacture of plywood at the beginning of the twentieth century. Now, what with hardboard, wallboard and chipboard, who can say in how many different forms wood will be used in a hundred years time? It is when we come to hardboard, softboard and wallboard that in the shape of the organization known as FIDOR (Fibre Building Board Development Organization, London) we have a deliberately planned campaign to launch new products upon the market from the word go! This organization was established in 1953 and, supported by a voluntary levy, it continues to give valuable service to its members. As mentioned above, plywood was the first material to break away from the traditional use of timber. It is not too much to say that it gained a market more by the experiments of enterprising consumers rather than by any concerted action by manufacturers. Now, however, we find a number of associations engaged both in defending plywood against still later comers, or endeavoring to secure a still larger share of the existing international market for their own national products. For instance, the Plywood Manufacturers' Association of British Columbia (PMBC) has for some time past been conducting an active marketing program on behalf of the plywood products of British Columbia. Success has attended its efforts so that the sales of Douglas fir plywood in the United Kingdom in 1959 were 50 percent above the 1958 figure. A United States organization, also working on the Pacific coast, the Douglas Fir Plywood Association, spent $5 million in promoting sales in 1959. Now the Finnish association of the plywood industry is planning the promotion of sales of Finnish birch plywood in the United Kingdom. Even the National Lumber Manufacturers' Association of the United States of America which used to be so sure of the competitive value of American lumber is now planning a marketing campaign known as " marketing unlimited." It is estimated that this sales promotion campaign will cost $12.5 million per annum, and that it would be basically financed by a contribution of $1 per 1,000 feet on the products of those lumber manufacturers supporting the program. This program has the universal support of the United States lumber press. It will be noticed that practically all the programs outlined above, both for lumber and wood products, have this in common, that they are committed either to defending their markets against newcomer substitutes, or in securing a larger slice of an existing market for their own particular production.
It would seem, therefore, that both the forester and the commercial timber man should have the common aim of marketing wood products in the most economical and attractive forms so that they can hold their own against competitive materials and commodities. This efficiency must be sought in all operations, including growing the timber, processing, shipping, marketing and distributing it. The forester can play his part by hammering out a balanced forest policy that win bring his trees to the market in their prime, and also by deciding which species should be helped and which suppressed. Also, the forester must bear in mind that successful modern processing of wood, whether as lumber or other processed products, demands large capital expenditure, and consequently the commercial man demands above all continuity of policy and a guaranteed production and delivery of his raw material. In this connection the system of management licences instituted in British Columbia following the second world war is being watched with great interest. As is known, the basic idea is to provide continuity of production of all kinds of forest products ranging from lumber to pulp, and at the same time to ensure adequate regeneration of the forests. By his control of royalty payments the forester can also help to a considerable extent the growth of local markets and the consumption of species for which there, has so far been little demand. The great need of tropical foresters in these days of sustained yield is above all a liberal forest policy that will bring as many species to market as possible. It should encourage the forester to remember that many species that started their career as so-called secondary timbers now grace the front pages of the importers' price lists.
In the past, as has been indicated above, the timber trade did not concern itself with scientific research. Markets existed and the lumber was dumped into them. It was not until the middle of the nineteenth century that wood as a constructional material faced any very serious competition. Then in quick succession came mild steel, aluminium and other alloys, reinforced concrete and plastics. One of the answers to the new position was the forest products research laboratory, but most of those now doing fine work have only been in existence for a few decades.
To the nineteenth century economist it was axiomatic that the law of supply and demand would ensure that a material would be used for the purpose for which it was beat suited. These tenets, however, no longer hold good. With the large variety of materials available to industry, the principle of eclectic use has lost its virtue. There can be no certainty that, because of its inherent properties alone, any raw material will be selected as the best for a particular use. The only valid criterion today is the suitability of the finished article. The ultimate consumer knows nothing about the raw material, he buys the finished article and judges it as to how useful it is to him. This brings us to the point that wood research directed toward ultimate design has a big part to play in the future. One would like to am a combination where the designer could go to the forest products research laboratory worker and ask him definite questions and receive definite answers as to how wood would behave in any particular set of circumstances to which the designer would wish to subject it.
The study entitled Trends in the utilization of wood and its products in housing, prepared in 1957 jointly by the Secretariats of the Food and Agriculture Organization of the United Nations and the United Nations Economic Commission for Europe, states that a progressive translation from sawn timber to other wood products should be faced with equanimity by both the forester and commercial interests. This new state of affairs will not only tend to develop further long-term markets for forest products, but also frequently create markets for lower grade wood in replacement of higher class sawn timber, which in itself may tend to become increasingly scarce. If it were not for the new techniques for the use of the lower grade timber, great markets would be lost to forestry.
For the successful development of markets for forest products, it does appear to be a fact that for the establishment of large-scale board and pulp operations the most reliable information must be provided by forest departments to interested parties, both as to the availability of wood supplies and their likely cost. A difficulty arises here that on the one hand long-term, firm decisions have to be taken on policy, and on the other, owing to possible currency changes or disturbances in markets, some kind of a yardstick has to be provided for a periodical review of the prices of the raw material. This position has already arisen in a number of large timber producing countries, and one is happy to record that almost without fail arrangements have been worked out satisfactorily to both the commercial undertakings and the forest departments concerned.
The same considerations but in different aspects occur in the marketing of new tropical hardwood species. Again, full consultations are the ideal between local forest departments and commercial timber men regarding the quantities likely to be available and the royalties to be paid. It cannot be emphasized too firmly that for the successful marketing of forest products, what is needed above all is a settled forest policy.