Domestic woes cause EWP makers to look abroad

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domesIt tic market. Louisiana-Pacific is stepping up efforts to produce and market its engineered wood products overseas.

Although third quarter 20ll sales of EWP were up 45Vo over third quarter 2010 (including a 7\Vo spike for LVL and LSL), the segment still lost $3 million for the quarter. The one bright spot has been growing international sales, particularly LSL to Australia.

In addition, LP is pushing towards a 1O-fold rise in business to China, although its goals are at the mercy of exchange rates, due to shipping costs.

Europe is another big target. LP introduced its SolidStart productsincluding I-joists, rimboard, laminated veneer lumber, and laminated strand lumber-to Great Britain late last year and in 2012 plans to expand EWP sales to the whole of Europe.

LP Chile and LP Brazil are also enjoying the best years in their histories. "In Chile, both mills continue to run at near capacity and domestic demand remains strong," said c.e.o. Rick Frost. "We are under some pricing pressure in Chile from imports."

Much of the increased demand in Chile arose from rebuilding in the wake of a 2010 earthquake. Half of the homes now built in Chile use wood framing rather than concrete structures, which is considered more susceptible to collapse.

Brazil has been a more difficult market to capture for LP, due to the need to change building codes. Consequently, LP has focused more on supplying products for existing designs, rather than pushing new construction techniques.

In time, LP would like to build a second EWP mill in Brazil. Frost said, "In Brazil, we are operating our Ponta Grossa mill at about half of its capacity, and the decision to start up the second thermal oil line there will probably put off, be put off until Q2 of next year. That will be based upon the business level at that time. About 20Vo to 257o of the Brazil volume is going to China for interior use."

In the meantime, Frost is bracing for the typical seasonal dropoff that strikes domestic markets across all product lines every fourth quarter.

"In general," he said, "I think the housing market remains weak about anyway you slice it."

Other EWP producers are crafting their own strategies. Weyerhaeuser, too, had heady growth in exports, particularly from its B.C. mills to Japan and China. Nonetheless, Weyco also announced the permanent closure of four previously curtailed EWP facilities-LVL plants in Albany, Or., and Simsboro, La., and veneer operations in Pine Hill, Al., and Dodson, La.

Boise Cascade increased third quarter sales of LVL by 23Vo and ljoists by l3Vo, while benefitting from lower raw material costs and hieher lumber sales prices.