Companies in this industry own timberlands and grow and harvest timber on production cycles of 10 years or more, primarily for use as lumber. Major companies include US-based PotlatchDeltic, Rayonier, and Weyerhaeuser, as well as Resolute Forest Products and West Fraser (Canada), Stora Enso (Finland), and Svenska Cellulosa (Sweden).
Demand for timber used to make lumber is driven primarily by residential construction activity. The profitability of individual companies depends on efficient operations. Large logging companies can have a cost advantage over smaller ones through the use of more efficient (and more expensive) machinery, but logging is a very local activity, often without significant economies of scale.
Products, Operations & Technology
Larger diameter trees are typically classified as high-value sawtimber, which can be processed into lumber, plywood, and veneer. Smaller diameter trees are often classified as pulpwood that is used to make paper and cardboard. Advanced technology and management allows the use of every part of the tree to make products. In addition to lumber and paper produced from the tree trunk, products are made from bark, tree resins, cellulose, chips, scraps, and even sawdust.