marked as the structural panel of the future

[DRODUCT. technology. manufacI turing and marketing advances point to another record year for producers and sellers of OSB.

Having taken over a majority share of such commodity categories as floor, wall and roof sheathing, OSB is now cracking new value-added markets, a development that is expected to further spark demand.

OSB for the first time outstripped plywood by a slim margin in North American structural panel production last year, totaling 40.2 billion sq. ft. (3/8" basis). According to APA-The

Engineered Wood Association, that margin will increase to 5.6 billion sq. ft., a 657o share for OSB, by 2002.

The Structural Board Association provides the following factors to explain why OSB will continue to gain major strides: rTt

One - Low cost OSB has the lowest cost structure of all structural wood panels. That means huge savings for builders and end consumers. In addition, OSB is now one of the most profitable sectors in the wood products industry.

I WO - No Big Glut

This factor is why manufacturers are racing to build new mills. Production is now about 957o of capacity, which will drop slightly as new mills are built. But, production should remain well above the 1996 low of l9Vo of capacity, when there was a huge glut that slashed prices.

Thfee - Environmental Advantages

The erosion of softwood plywood production will switch demand from plywood to OSB. Leonard Guss. Leonard Guss Associates, estimates that at least 6 billion sq. ft. of plywood production will disappear in eight to l0 years, due to mothballing of antiquated plants and the diminishing availability of construction grade plywood.

The scarcity of larger trees has affected plywood, which must be made from individual veneer strips, or peeler logs. OSB is made from strands of small diameter trees such as aspen. The strands are aligned longitudinally and laterally in alternate layers for structural strength and bonded with water resistant resins under heat and pressure.

Using all parts of the log, OSB is an extremely resource-efficient product. It makes the most of fast growing trees, a factor complementing environmental considerations.

FOUf - Product Advantages

OSB, Guss believes, is not only an adequate replacement for plywood but convincingly better. "OSB has unlimited size variation, even up to 8' x 24'. It's good on both sides and offers a broad array of thicknesses," he says.

Guss says OSB's blending process allows for a more thorough distribution of wax and resin on the strand surfaces, improving control of board properties. Its manufacturing process yields consistent panels free of knots, splits and voids, making them easier to saw, drill, nail, plane and sand.

Louisiana-Pacific 6200 6s003900*

Portland, Or.

18 plants: Hanceville, Al.; Dawson Creek, B.C.; Montrose, Co.; Athens, Ga.; Houlton, Me.; Sagola, Mi.; Tomahawk (3)-, Hayward, M.; Swan River, Manitoba; Roxboro, N.C.;Jasper, Silsbee-, Carthage, Tx.: Maniwaki, St.-Michel Des Saints, Chambord, Quebec.

Five - Consolidation

Last year two of the largest wood products acquisitions ever occurred. The two largest OSB manufacturers in North America, Louisiana-Pacific and Weyerhaeuser, bought out Le Groupe Forex and MacMillan Bloedel, respectively the second and third largest Canadian OSB makers. Duplicate functions for the combined entities will be cut and efficiency increased.

These moves underscore a new strategy by manufacturers moving toward manufactured wood products to supply higher margin building materials. A decade ago, firms were not pressured to adopt such a strategy because traditional lumber was plentiful and generating good returns.

Six - Technology

Consolidation is being accompanied by a frenetic push to upgrade existing mills and develop new mills with the latest technology that increases efficiency and results in lower cost but higher quality panels.

Seven - Performance Manipulation

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9 olants: Drayton Valley, Edson, Slave Lake, Alberta; Grayling, Mi.; Elkin, N.C.;Sutton, W.V.; Wawa, Ontario (North Superior Forest Products); Miramichi, New Brunswick (Eagle Forest Products); Hudson Bay, Saskatchewan (Saskfor MacMillan).

Georgia-Pacific Corp.

Atlanta, Ga.

0!gdg: Brookneal, Skippers, Va.; Dudley, N.C.; Gremda, Ms.; Mount Hope, W.V.; Woodland, Me.

Norbord lndustries

Toronto, Ontario

5 olants: La Sane, Val-d'Or, Quebec; Bemidji, Mn.; Guntown, Ms.; (Joanna, S.C., opened July 2000)

Grant Forest Products

Englehart, Ontario

2 plants: Engleharl, Timmins, Ontsio,

Huber Engineered Woods

Charlstle, N,C.

4-plad$: Commerce, Ga.; Easton, Me.; Orystal Hill, Va.; $pring City, Tn.

Potlatch Corp.

Spokane, Wa.

3 plants: Bemidji, Cook, Grand Rapids, Mn.

Ainsworth Lumber Co., Ltd.

100 Mile House, B.C.

2 plants: 100 Mile House; Grand Prairie, Alberta.

International Paper Co.

Purchase, N.Y.

3 olants: Nacoqdoches, Jefferson, Tx.; Cordele, Ga.

Tolko Industries

High Prairie, Alberta

1 plant High Prairie.

Slocan Group

Richmond, British Columbia

1 plant: Fort Nelson, B.C.

Boise Cascade

Boise, ld.

'| plant: Barwick, Ontailo.

Martco Partnership

Monow, La.

1 plant; Monow.

Willamette Industries

Portland, 0r.

1 plant: Arcadia, La.

Langboard, Inc.

Quitman, Ga.

1 plant: Quitman.

Tembec Inc.

Grand Mere, Quebec

1 planl Grand Mere.