3552 Chapter 28 



In computing cost of manufacture, all wood was assumed purchased at $40/100 

 cubic feet delivered to the mill site. Annual consumption of wood is estimated at 

 11,946,330 cubic feet. 



28-27 $8.2 to $28.9 MILLION— OPPORTUNITIES IN 



FOUR SOUTHERN LOCATIONS FOR PRODUCTION OF 



STRUCTURAL FLAKEBOARD^' 



Most analysts of the structural panel business in the South agree that it is more 

 expensive to manufacture sheathing plywood than structural flakeboard. Data in 

 table 28-5 (assembled in 1981) and related discussion indicate an annual cost of 

 $16,401,000 to manufacture 80.0 million square feet of !/2-inch southern pine 

 three-ply CDX sheathing plywood ($205. 01 /thousand square feet), whereas 

 costs to manufacture competitive 7/16-inch southern hardwood flakeboard 

 should be about $11,510,000 for 94.4 million square feet ($121.93/thousand 

 square feet). 



Koch's (1978) analysis of the potential competitive situation of southern 

 hardwood structural flakeboard was predicated on equal thickness of flakeboard 

 and sheathing plywood, i.e., Vz-inch. Emerging industrial practice indicates, 

 however, that 7/16-inch-thick flakeboard will serve where '/2-inch sheathing 

 plywood now serves; thus Koch's analysis^^, which follows, probably under- 

 states the economic competitive position of flakeboard. , 



PLYWOOD PRICE AND FREIGHT STRUCTURE 



Flakeboard sheathing will compete in price and function with CDX plywood 

 sheathing made from Douglas-fir and southern pine. To enter the market, V2- 

 inch flakeboard probably must undersell three-ply southern pine, the most eco- 

 nomical Vi-'mch plywood sheathing, because it is heavier and harder to nail. It 

 might be noted, however, that flakeboard weighs no more than gypsum board 

 which carpenters handle routinely without undue difficulty. Some manufactur- 

 ers contemplating flakeboard production feel that floor underlayment provides 

 easiest market entry, because the heavy flakeboard panels are more easily 

 handled at floor level than on roofs. 



Mill prices and delivered prices for sheathing are dependent on the cost of 

 transportation to market. For example, based on December 1977 freight rates. 



'Slightly condensed from Koch (1978). 



