This is the second in a series related to the Q4 2019 Forisk Research Quarterly’s (FRQ) forest industry analysis and timber price forecasts for North America.
Technology is the application of science or knowledge for practical purposes. Examples of technology at work include hammers and hair dryers and the Hubble Space Telescope. In the forest products industry, investments in technology range from the use of advanced seedlings and continuous dry kilns (CDKs) to ArcGIS and engineered wood products.
What have we learned about technology based on research of the pulp and paper sector? This post summarizes three observations from Forisk’s Q3 2019 Strategy Note on the use and implications of technology in the forest products industry.
- Investments in technology allow and often require scale. Technologies that deliver efficiency, yield and productivity gains lower per unit costs and payback periods while relying on larger capital commitments. Data across North American pulp firms confirm a common strategy of scale and consolidation to focus and optimize these investments.
- Current R&D projects point to massive growth potential from forest-derived products. While innovations with solid wood products focus on getting more value from logs and boards, advances in pulp and related sectors move towards technological and product innovations that start at the cellular level. New pulp and nanocellulosic applications, for example, could literally reshape industries and change the world.
- Forest industry technologies can help firms attract talent. The advances occurring in the forest industry, and especially in the pulp sector, require folks who can communicate, lead and solve problems with teams. And this need creates opportunities for exciting and diverse careers, reinforcing the need for a “people strategy” within the forest industry.
For forest industry executives and investors, the lessons in this Note reinforce the scale and potential of technological innovations in pulp and paper to reshape industries outside of traditional forest products. Research and development projects now meet at the cell wall, where researchers work to remove, separate or modify lignin and hemicellulose from cellulose for applications from pulp to cellulosic ethanol to the development of “super-materials” for cars, boats, and body armor.
In the end, when researchers untangle ways to create cellulose-based products at costs near petroleum-based products, then we would expect massive shifts in global productive and economic capacities, and an enormous demand for talented individuals to contribute and grow.
Click here to read and download the complete Q3 2019 Forisk Strategy Note on this research.
Please join us for a day dedicated to sharing research related to forest industry operations and investments. Eegister for Wood Flows & Cash Flows, Forisk’s annual conference on December 5th in Atlanta. Executive Panelists will address threats and risks to the forest industry.