Plywood industry sees improving markets

EROSPECTS for a gradually f improving structural panel marketplace in second half l98l and throughout 1982 were termed good at the 45th annual meeting of the American Plywood Association at the Jantzen Beach Thunderbird Motor Inn, Portland, Or.

Outgoing APA chairman and president Don Deardorff, president and general manager, Fourply, Inc., Grants Pass, Or., said the APA is predicting 18.5 billion square feet of U.S. structural panel demand in l98la l0o/o improvement over 1980.

Factors assisting this measure of recovery, he advised, include continued strength in markets other than housing, such as nonresidential construction, industrial applications, home repair and remodeling, and exports to Europe.

Deardorff reported that due to higher-than-expected housing starts in first quarter 1981, the association feels starts for this year should exceed the 1.4 million APA had forcast earlier, "despite a second quarter that will be lower than anticipated."

He continued: "Given some real progress in changing the tax laws and in slashing government spending, APA's vision of 1982 is reasonably optimistic - nearly 1.8 million housing starts, contributing to total structural panel demand for the year of about 2l billion squzre feet. "

Deardorff called on the panel industry to support Administration and Congressional efforts "to restore even-handed management of the national forests."

He charged that preservationists are trying to indefinitely continue the prolonged U.S. Forest Service study of roadless areas in the national forests, and to prevent the return of multiple-use of millions of acres of lands "fairly judged not suitable for wilderness."

He said that the nation faces "unacceptable alternatives" if Congress fails to provide a prompt legislative solution for RARE II. Among these alternatives, he listed

"more plywood and lumber mill ciosures and unemployment, further uncertainty and even more drastic reductions in timber supply, higher prices for wood and paper products, and even greater U.S. reliance on imported lumberin a country which is fully capable of being selfsufficient. "

APA executive v.p. Bronson J. Lewis analyzed reasons f or "relatively good" industry performance to date in the l98l panel marketplace.

He commented: "A question frequently posed is: 'With housing admittedly off pace, where in the world is all that plywood going?"

Lewis added: "While market conditions obviously could be a lot more stableparticularly with the alarming return to high interest rates, we don't really have to look very far to see why we've had relatively good performance, compared to many other industries. A good part of it is the determination of APA members to scramble for new markets over the last couple of years . . markets that have added buoyancy to our industry while housing has been in trouble. And we've worked just as hard to get a bigger share of the smaller housing "pie," too, so that we sell more products for every home that does get built."

Story at a Glance

Recovery lactors in markets other than housing include industrial, commercial, home repair & remodeling and ex. ports to Europe. .'81 housing start forecast: 1.4 million.

But plywood production dropped only 1690."

Opportunities for retail lumber dealers and home improvement center operators are pronounced, according to speaker G. Hunter "Pete" Bowers of HUD. Noting that two-thirds of the homes in America are more than 20 years old, he stressed the potential market for retailers to sell plywood to remodelers.

He said that HUD is working on plans to aid first time home buyers presently priced out of the market. Additionally, Bowers said, the Reagan Administration is seeking to streamline government regulations (currently they account for 2090 of the cost of a house) and to allow more local control of codes.

Tom Fast, director of APA's international operations, noted that the export market had allowed some Northwest plywood mills to survive the present down market. He said additional promotion to specifiers and users was needed to expand this important and growing market. Forty APA member mills now ship plywood to Europe.

He feels the growth will be in timber frame construction and that our system can save European builders in their labor costs and home-owners in their energy saving efforts. He noted that Wickes, America's biggest retail chain, plans to add 100 new units in Europe.

John B. Crowell, Jr., the new head of the Forest Service and Assistant Secretary of Agriculture, noted goals for the new administration. Among them: avoiding the waste of old growth timber on public lands and the development of a comprehensive system for sustained yield, but with respect for the environment.

Concluded the APA chief executive: "The results of all of this ongoing promotion, in the face of severe budget cutbacks, could even be called spectacular. Housing dropped 26Vo from 1979 to 1980.

He said that we need eventually to double the present cut from the National Forests. Crowell said that this would not occur within the next eight years.

His position is for multiple use of non RARE II lands and the utilization of exceptionally productive lands.