Economic Feasibility Analyses 3569 



corresponds to a manufacturing cost of $140/thousand square feet, 7/16-inch 

 basis. The plant would employ 220 people, and annually consume 3.06 x 10^ 

 kWh of electrical energy and 4.0 x 10^ Btu of wood residue for energy. 



Because of the depressed state of the housing market, no sales price of the 

 product can be realistically projected, so return on investment is not calculated. 

 The plant proposed would have competitive advantages derived from low wood 

 cost, economical thermal energy, and efficient waste-water disposal. 



In-place operations can be expanded by expenditure of $80 to $ 1 00/thousand 

 square feet (Vs-inch basis) of additional annual capacity; the new capacity 

 analyzed would cost $150/thousand square feet. This suggests the liklihood of 

 expansion of existing plants, rather than construction of new plants, should 

 national output of hardboard siding need to be increased. 



28-31 $50.0 MILLION— INTEGRATED PLANT TO 



MANUFACTURE STRUCTURAL FLAKEBOARD, 



DECORATIVE PLYWOOD, AND FABRICATED JOISTS'' 



This enterprise proposes to rehabilitate annually — by clear felling, site prep- 

 aration, and planting — 25,000 acres of level to rolling land averaging about 490 

 cubic feet per acre of stemwood in small hardwood trees 5 inches in diameter at 

 breast height (dbh) and larger, and of many species, plus an equal volume of 

 above-ground biomass in stembark and tops, and in trees smaller than 5 inches in 

 dbh. By usual utilization procedures, such wood is an unmerchantable residue 

 from the harvest of merchantable southern pines. Since the operation incidental- 

 ly prepares the site for planting, timber purchasing can be facilitated by arrange- 

 ments which will leave the land planted to trees of owner's choice. 



On an annual basis, 398,265 tons (ovendry basis) of such wood and bark will 

 be harvested and converted in an energy self-sufficient plant to the following: 

 208,688 tons of structural flakeboard (see chapter 24) sheathing and decking 

 (sold at $200/ton), 16,298 tons of decorative hardwood plywood ($400/ton), and 

 20,191 tons of long fabricated joists (fig. 24-57) with parallel-laminated veneer 

 flanges and flakeboard webs ($600/ton), for a total product yield of about 60 

 percent — all on a dry-weight basis (fig. 28-35). 



Following are projected operating results and other essential data for a three- 

 shift operation: 



Capital investment, including working capital $50,000,000 



Operating costs, annual $40,000,000 



Sales, annual $60,371,400 



Net profit, annual (before income taxes) $20,371 ,400 



Return on sales 33.7 percent 



Return on investment 40.7 percent 



Number of mill employees (harvesting and planting are contracted) 250 



^^Abstracted from Koch (1982). 



