3522 Chapter 28 



Key statistics for the projected enterprise are as follows: 



Capital investment $718,038 



Operating cost, annual $669,792 



Sales, annual $940,800 



Net profit, annual 



(before income tax) $271 ,008 



Return on sales 28.8 percent 



Return on investment 37.7 percent 



Employees 8 or 9 



Energy requirements, annual 



Electrical 420,000 kWh 



Diesel fuel Sufficient for one front-end loader 



Important to the economic efficiency of this enterprise is its location adjacent 

 to an existing pallet assembly plant, allowing both plants to work entirely with 

 green wood, which not only facilitates nailing, but avoids the need for drying in 

 stacks or kilns. It also essentially eliminates costs of sales, inventories of raw 

 materials or product, and degrade of parts during storage or shipment. 



28-12 $775,000— SAWMILL, KILN, AND PLANING MILL 



TO PRODUCE YELLOW-POPLAR LUMBER FOR 



FRAMING BUILDINGS" 



In this proposed operation, a small hardwood sawmill is purchased and 

 converted for sawing of yellow-poplar framing lumber, or a mill is built and 

 equipped with used machinery to minmize investment (fig. 28-14 top). Proposed 

 is a circular-headrig mill, with debarker, live deck, log turner, trimmer, and a 

 double-arbor edger. Additional facilities would include a dry kiln, dry ripping, 

 surfacing, and end trimming equipment. Output of such a mill could largely be 

 absorbed by local markets. Raw material for the operation is 8- to 13-inch- 

 diameter grade 3, yellow-poplar logs. The mill cuts about 12 Mbf of logs, Doyle 

 scale, per day, producing 20 Mbf of 2- by 4- and 2- by 6-inch framing lumber. 

 Based on 250 single-shift working days per year, annual log input is 3 million 

 board feet log scale and lumber production is five million board feet. From each 

 ton of logs (ovendry- weight basis), lumber yield is about 0.34 ton, chips and 

 shavings 0.45 ton, and bark and sawdust 0.21 ton (fig. 28-14 bottom). 



Log cost at this eastern Tennessee mill is projected to average $88/Mbf Doyle 

 scale. Average sale price of the kiln-dried framing lumber is $204/Mbf fob mill. 

 Chips and shavings are sold at $10/ton fob mill and sawdust at $5/ton fob mill to 

 yield daily revenue from residues of $495. 



'"^Abstracted from Stumbo (1981b). 



