Economic Feasibility Analyses 3567 



Key statistics projected for the enterprise are as follows: 



Capital investment $33,000,000 



Operating cost, annual $20,586,000 



Sales, annual $25,000,000 



Net profit, annual (before income tax) $ 4,414,000 



Return on sales 18 percent 



Return on investment (before income tax) 13 percent 



Employees 130 



Energy requirement per thousand square feet 



Electrical 325 kWh 



Wood residue (self generated and purchased) or oil and gas for 



non-electrical energy requirement 22 x 10^ Btu 



Wood residue from plant operations is estimated insufficient, so an additional 

 4,200 tons of hog fuel, ovendry basis, must be purchased annually in addition to 

 the cord wood. 



28-30 $40.0 MILLION— EVALUATION OF A NEW 



FACILITY TO MANUFACTURE HARDBOARD 



SIDING BY THE SCREENBACK PROCESS32 



In the years 1972 through 1979, 7,688 to 7,843 million square feet of hard- 

 board, !/8-inch basis, were manufactured in the United States, of which 55 to 57 

 percent was medium-density hardboard siding (MDS). From 1978 through 1980 

 total manufacturing capacity for MDS in the United States was about 1,282 

 million square feet (7/16-inch basis), probably just adequate to satisfy demand 

 generated by the 2,023,000 housing starts in 1978. 



This 1980 capacity was in plants averaging about 200 million square feet 

 output per year ('/s-inch basis) which had book value then of about $10 million 

 each, or a book value of $50/thousand square feet capacity, '/s-inch basis. A new 

 plant of the design proposed, if built in 1980, would have a book value of $150/ 

 thousand square feet capacity ('/s-inch basis) with estimated cost escalation of 9 

 percent annually to 1990 if built in later years. 



The enterprise analyzed is a proposed new facility located on a 100-acre tract 

 with a 200-acre tract within pumping range (1 mile or less) for irrigation disposal 

 of waste water; such disposal is essential. Performance of existing plants sug- 

 gests that the screenback process for single-line forming and hot pressing of wet 

 mats to manufacture smooth-one-side 7/16-inch medium density prime-painted 

 siding affords greatest opportunity for utilization of undebarked (rough) south- 

 em hardwoods, with the oak-hickory-ash content not to exceed 50 percent. 



By this process (fig. 28-34), chipped wood is pressure-refined (sec. 23-6 and 

 fig. 25-21) in a first stage, followed by atmospheric refining. The fibers, after 

 forming in a mat, are hot-pressed to a density of about 44 pounds/cubic foot 

 (1,600 pounds/thousand square feet, 7/16-inch basis). 



^2 Abstracted from Stewart (1981). 



