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Wood Manufacturing – a high-tech sunrise industry

Wood is beautiful, practical and strong, and it has more uses than people realize. In addition, it has such good environmental properties that using more wood instead of other materials would lower atmospheric carbon dioxide concentrations. 

A beautiful air control tower in Skellefteå, in the north of Sweden.We are not talking about a magic new material, but about ordinary wood, albeit subjected to high-tech processes in which its functional, aesthetic and environmentalproperties are improved in order to produce higher-value products.

Nowadays wood research is conducted at most universities of techno-logy, often in close cooperation with the timber industry and wood research institutes such as SP Trätek. VINNOVA has identified wood manufacturing as a fast-growing industry and contributes research funding to it. Two sectors that are considered to have growth potential are the interior industry and wood-based construction.

Laminated wood (glulam) was the first processed wood material. Nowadays it is often used for structural beams in many different types of buildings. Another processed product on the market is called solidwood. It consists of cross-glued laminated timber that can be used for beams and other load-bearing structures. The technology ensures a strong, dimensionally stable and very light material. Solidwood can have a free span of up to 12 metres, but is only a quarter the weight of concrete.

Martinsons, a company in the village of Bygdsiljum in northern Sweden, has conducted intensive research in order to develop the new products glulam and solidwood.

– We have laid a good foundation for a successful business with excellent export opportunities, says Lars Martinson, the managing director.

– The new products are important, but at the moment we are concentratingon developing effective and efficient system solutions. So we are designing standard modules that can be used in flexible applications. Building a wooden house should not be any more difficult than building one with Lego, says Lars Martinson. Martinson is very keen on the idea of building large apartment blocks of wood. A long-term research project has been started to produce finished modules with all the installations made at the factory. The buildings could then easily be assembled on the building-site. Five six-storey apartment blocks of wood with a total of 96 apartments have just been completed in Sundsvall, a seaside town in the north of Sweden. All those involved in the project were pleasantly surprised by the result.

A sunrise industry

– We were worried that noise might be a problem in these buildings, says Lars Martinson. But our newly developed patented sound-absorption system works better than we expected.

The residents agree that the buildings are quiet. The sounds that can be heard are soft and less invasive than in a building built of hard materials.

Japan is the company’s largest export market at present. There is such great demand for glulam that a new production line has been built to meet it. One of the reasons why glulam is so popular nowadays is that it is both stronger and lighter than steel. The company’s Japanese customers have realized that wooden buildings offer a better chance of surviving an earthquake.

Forest industry requires wood at a steady rate and a competitive price 

Finland’s forest industry’s wood raw material supply costs are, depending on the tree species, up to 50 percent higher than in many competing countries.

Violent fluctuations in raw material costs serve to increase the sector’s sensitivity to economic fluctuations.  

The steady inflow of wood at a competitive price level is essential to profitable production and investments in the forest industry in Finland. The sector’s profitability is well under the target level, despite the economic upswing. With raw material and labour costs rising dramatically, any gain from stepping up operations is threatening to evaporate.

"A steady supply of wood raw material at a competitive price level is extremely important to Finland’s economy as well. If wood is procured from private forests at the forest industry’s target rate of around 60 million cubic metres a year, which is 15 million cubic metres more than in 2006, Finland’s GNP will increase by well over 900 million euros. Approximately 300 million more euros in taxes from wood sales and processing would be collected by the State”, says the Finnish Forest Industries Federation’s managing director Anne Brunila. "Every single cubic metre of wood obtained from domestic sources increases the tax revenue of the State - of all Finns - by over 10 euros."

Raw material costs for Finland’s forest industry are higher than in many competitor countries

The mill costs of softwood logs in Finland are considerably higher than in competitor countries. The difference between Finland and Sweden, for instance, at present is almost 30 euros per cubic metre.

The spruce pulpwood used by the mechanical pulp industry is almost 20 percent cheaper in Sweden and the United Kingdom. In the world’s largest pulp producing country, the USA, pulpwood is 24 - 49 % cheaper than in Finland. In South America hardwood pulpwood is as much as 42 - 64 percent cheaper compared to Finland.

Last year, the industry used 9 million cubic metres of domestic spruce pulpwood for mechanical pulp production and 13 million cubic metres of pine pulpwood, together with 13 million cubic metres of birch pulpwood, for chemical pulp manufacturing. More than 12 million cubic metres of pulpwood was imported for industrial consumption, the largest proportion comprising birch.

In addition to stumpage prices, harvesting and transport costs to the mill affect the cost of wood.

Thermo-mechanical pulp is a paper raw material made using electrical energy for grinding up wood. Chemical pulp is a paper raw material made by cooking chipped wood.

Spruce log costs at mill.pdf

Spruce pulpwood costs at mill.pdf

Hardwood pulpwood costs at mill.pdf

 

Further information:

Anu Islander, Senior Advisor, Forestry, Sustainable Development and Resources, tel. 358-9 32 6678

 www.forestindustries.fi

  

  


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Production and Transaction Economies and IS Outsourcing: A Study of the U.S. Banking industry

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Production and Transaction Economies and IS Outsourcing: A Study of the U.S. Banking industry


 Production and Transaction Economies and IS Outsourcing: A Study of the U.S. Banking industry

Abstract / This paper studies economic determinants of IS outsourcing. It argues that a focus on comparative economic theories and models can improve our ability to explain outsourcing with-in the larger context of organizational strategy and environment. Specifically, the research constructs of production cost, transaction cost, and financial slack are examined simultaneously to understand what influences the outsourcing decision. To empirically test these relationships, information was gathered from senior IT managers in 243 U.S. banks. Financial indices from the archives of the Federal Reserve Bank were a second important source of data. Results of the study show that IS outsourcing in banks was strongly influenced by production cost advantages offered by vendors. Transaction costs played a role in the out-sourcing decision, but they were much smaller than production costs. Finally, financial slack was not found to be a significant explanator, although firm size was a significant control factor. The paper has important implications for research and practice. For researchers, the findings provide evidence that financial criteria can be key factors in outsourcing decisions and compare the relative effects of production and transaction costs. For practitioners, the findings suggest that managerial sourcing strategies need to weigh both costs when hiring systems integrators.

مقاله: انگلیسی / JSTOR

سال انتشار: 1998

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فرمت فایل اصلی: pdf

تعداد صفحات: 19


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Production and Transaction Economies and IS Outsourcing: A Study of the U.S. Banking industry