# Wood products: Value chain, from upstream to the customer Sawmills and panel makers producing plywood, MDF, engineered timber and wood pellets Source page: https://www.materialinsights.org/industries/wood_products/value-chain/ #### Value chain, from upstream to the customer **Criticality to the chain:** 5 · Chokepoint 4 · Critical 3 · Important 2 · Supporting 1 · Commodity service Stage 1 **Growing woodIndustrial forest and plantation owners**4 · Critical Own or lease forests and plantations, plan rotations and sell standing timber or logs to sawmills, panel plants and exporters.^[1](https://openknowledge.fao.org/handle/20.500.14283/cd3650en) **Why critical:** Rotations take 7 to 50 years, so supply cannot respond quickly, and export-grade logs come from a few countries. Technologies Clonal plantation forestry Forest inventory by LiDAR and satellite Silviculture and thinning regimes Forest certification management Depends on Commodities [Tm Timber](https://www.materialinsights.org/commodities/lumber/)[H₂O Water](https://www.materialinsights.org/commodities/water/)[P Phosphate rock](https://www.materialinsights.org/commodities/phosphate/)[N Nitrogen (ammonia)](https://www.materialinsights.org/commodities/nitrogen/) Chemicals [Gly Herbicides](https://www.materialinsights.org/chemicals/herbicides/)[Ins Insecticides](https://www.materialinsights.org/chemicals/insecticides/) Energy [Sun Sunlight](https://www.materialinsights.org/energy/e_sunlight/)[Bm Biomass](https://www.materialinsights.org/energy/e_biomass/) Industries [Finance: banking, insurance, markets](https://www.materialinsights.org/industries/finance/)**Examples:** Weyerhaeuser, Arauco, Stora Enso, Suzano **State forest corporations and farm-forestry growers**3 · Important Public forest agencies sell auctioned timber, and farmers grow eucalyptus, poplar and casuarina on field boundaries for local mills under buy-back or open-market arrangements.^[2](https://www.itto.int/news_releases/id=6815) **Why important:** Many small growers supply Indian mills, but their planting follows prices and permits, causing boom-and-bust cycles. Technologies Agroforestry High-yield clonal saplings Timber auctions Transit permit systems Depends on Commodities [Tm Timber](https://www.materialinsights.org/commodities/lumber/)[H₂O Water](https://www.materialinsights.org/commodities/water/) Chemicals [Ur Urea](https://www.materialinsights.org/chemicals/urea/) Energy [Sun Sunlight](https://www.materialinsights.org/energy/e_sunlight/)[Mu Muscle power](https://www.materialinsights.org/energy/e_muscle/)**Examples:** Forest Development Corporation of Maharashtra, ITC (farm and social forestry), Kerala Forest Development Corporation Stage 2 **Harvesting and log supplyLog traders and forestry-machine makers**2 · Supporting Traders and contractors fell, haul or import logs and sell them by volume to mills, using harvesters and forwarders built by specialist machine makers. **Why supporting:** Many contractors and traders compete, though export bans or quarantine rules can shut a source country quickly. Technologies Harvesters and forwarders Log scaling and grading Phytosanitary fumigation Bulk log shipping Depends on Commodities [Tm Timber](https://www.materialinsights.org/commodities/lumber/) Chemicals [Lub Lubricant additives](https://www.materialinsights.org/chemicals/lubricant_additives/) Energy [Oil Crude oil](https://www.materialinsights.org/energy/crude_oil/)[Shp Ship propulsion](https://www.materialinsights.org/energy/e_marine/) Industries [Machinery and equipment](https://www.materialinsights.org/industries/machinery/)[Transport and logistics](https://www.materialinsights.org/industries/transport_logistics/)**Examples:** Ponsse, Komatsu Forest, John Deere (forestry), Pan Pac Forest Products Stage 3 **Primary processingSawmills**2 · Supporting Cut logs into lumber, dry and grade it, and sell it to builders, joinery and furniture makers, packaging firms and distributors.^[1](https://openknowledge.fao.org/handle/20.500.14283/cd3650en) **Why supporting:** Thousands of sawmills worldwide; buyers can resource standard grades within weeks. Technologies Scanning and optimised sawing Kiln drying Strength grading Residue-fired boilers Depends on Commodities [Tm Timber](https://www.materialinsights.org/commodities/lumber/) Chemicals [Fng Fungicides](https://www.materialinsights.org/chemicals/fungicides/) Energy [BmC Biomass combustion and CHP](https://www.materialinsights.org/energy/e_bio_combustion/)[Dist Distribution grids, mini-grids and interconnectors](https://www.materialinsights.org/energy/e_distribution/) Industries [Machinery and equipment](https://www.materialinsights.org/industries/machinery/)**Examples:** West Fraser, Canfor, Södra, Stora Enso **Plywood and veneer mills**2 · Supporting Peel or slice logs into veneer, glue and press it into plywood and decorative sheets, and sell them under brands through dealers. **Why supporting:** A few national brands but hundreds of regional mills, so supply is competitive. Technologies Rotary peeling lathes Veneer dryers Hot presses Phenol and urea-formaldehyde gluing Fire- and borer-resistant treatment Depends on Commodities [Tm Timber](https://www.materialinsights.org/commodities/lumber/) Chemicals [HCHO Formaldehyde](https://www.materialinsights.org/chemicals/formaldehyde/)[Ur Urea](https://www.materialinsights.org/chemicals/urea/)[Phe Phenol and acetone](https://www.materialinsights.org/chemicals/phenol/)[Ins Insecticides](https://www.materialinsights.org/chemicals/insecticides/) Energy [BmC Biomass combustion and CHP](https://www.materialinsights.org/energy/e_bio_combustion/)[Dist Distribution grids, mini-grids and interconnectors](https://www.materialinsights.org/energy/e_distribution/)**Examples:** Century Plyboards, Greenply Industries, Georgia-Pacific, Duroply Industries **Particleboard and MDF makers**3 · Important Chip and refine plantation wood and residues, press them with resin into boards, and laminate them for furniture and interior makers.^[1](https://openknowledge.fao.org/handle/20.500.14283/cd3650en) **Why important:** Plants are capital-intensive, with few large producers per region, and furniture makers qualify board grades. Technologies Thermo-mechanical refining Continuous presses Melamine short-cycle lamination Low-emission (E0, E1) resins Depends on Commodities [Tm Timber](https://www.materialinsights.org/commodities/lumber/) Chemicals [HCHO Formaldehyde](https://www.materialinsights.org/chemicals/formaldehyde/)[Ur Urea](https://www.materialinsights.org/chemicals/urea/)[PU Polyurethanes (MDI, TDI, polyols)](https://www.materialinsights.org/chemicals/polyurethanes/)[Pnt Paints and coatings](https://www.materialinsights.org/chemicals/paints_coatings/) Energy [BmC Biomass combustion and CHP](https://www.materialinsights.org/energy/e_bio_combustion/)[Dist Distribution grids, mini-grids and interconnectors](https://www.materialinsights.org/energy/e_distribution/) Industries [Paper and packaging](https://www.materialinsights.org/industries/paper_packaging/)**Examples:** Kronospan, Egger, Greenpanel Industries, Action Tesa Stage 4 **Inputs and enablersWood adhesive and resin suppliers**3 · Important Make formaldehyde-based and isocyanate resins and adhesives used by plywood, panel and engineered-wood plants. **Why important:** Several suppliers exist, but resin is the largest cost after wood and plants are tuned to a recipe. Technologies Urea-, melamine- and phenol-formaldehyde resins pMDI binders Low-formaldehyde chemistry Bio-based adhesives Depends on Chemicals [MeOH Methanol](https://www.materialinsights.org/chemicals/methanol/)[HCHO Formaldehyde](https://www.materialinsights.org/chemicals/formaldehyde/)[Ur Urea](https://www.materialinsights.org/chemicals/urea/)[Phe Phenol and acetone](https://www.materialinsights.org/chemicals/phenol/)[PU Polyurethanes (MDI, TDI, polyols)](https://www.materialinsights.org/chemicals/polyurethanes/)[Adh Adhesives and sealants](https://www.materialinsights.org/chemicals/adhesives/) Energy [Gas Natural gas](https://www.materialinsights.org/energy/natural_gas/)**Examples:** Hexion, BASF, Pidilite Industries, Bakelite Synthetics **Woodworking and panel-press machinery makers**4 · Critical Build continuous presses, refiners, peeling lathes and CNC woodworking machines for mills and furniture factories. **Why critical:** Continuous press lines come from very few, mainly German, makers and take a year or more to deliver. Technologies Continuous panel presses CNC routers and edge banders Veneer lathes Optical log scanners Depends on Commodities [St Steel](https://www.materialinsights.org/commodities/steel/) Energy [Mot Electric motors and drives](https://www.materialinsights.org/energy/e_motors/) Industries [Machinery and equipment](https://www.materialinsights.org/industries/machinery/)[Electrical equipment](https://www.materialinsights.org/industries/electrical_equipment/)**Examples:** Siempelkamp, Dieffenbacher, Homag, Biesse **Forest certification and legality bodies**2 · Supporting Certify sustainable forest management and chain of custody so that wood can enter regulated markets such as the EU. **Why supporting:** Two main schemes with many accredited auditors, but certification is required to sell into the EU and many brands. Technologies FSC and PEFC standards Chain-of-custody audits Due-diligence and traceability systems Depends on Energy [Bld Energy in buildings](https://www.materialinsights.org/energy/e_buildings/) Industries [Professional services](https://www.materialinsights.org/industries/professional_services/)[Software and IT services](https://www.materialinsights.org/industries/software_it/)**Examples:** Forest Stewardship Council, PEFC, Bureau Veritas Stage 5 **Secondary products and distributionEngineered-timber, joinery and wood-pellet makers**2 · Supporting Make cross-laminated timber, glulam, doors, windows, flooring and pellets from sawn wood and residues for builders and energy users. **Why supporting:** A growing, competitive field; standard joinery can be resourced quickly, though CLT capacity is still limited. Technologies Cross-laminated timber presses Finger jointing CNC joinery Pelletising Depends on Commodities [Tm Timber](https://www.materialinsights.org/commodities/lumber/) Chemicals [Adh Adhesives and sealants](https://www.materialinsights.org/chemicals/adhesives/)[Pnt Paints and coatings](https://www.materialinsights.org/chemicals/paints_coatings/) Energy [BmC Biomass combustion and CHP](https://www.materialinsights.org/energy/e_bio_combustion/)[Dist Distribution grids, mini-grids and interconnectors](https://www.materialinsights.org/energy/e_distribution/)**Examples:** Binderholz, Mayr-Melnhof Holz, Stora Enso, Drax (pellets) **Timber merchants and home-improvement retailers**1 · Commodity service Stock and sell lumber, boards and plywood to contractors, carpenters and households. **Why commodity service:** Many merchants in every town; buyers switch freely. Technologies Cut-to-size services Warehousing Trade credit Depends on Commodities [Tm Timber](https://www.materialinsights.org/commodities/lumber/) Energy [ICV Combustion road vehicles](https://www.materialinsights.org/energy/e_road_ice/) Industries [Transport and logistics](https://www.materialinsights.org/industries/transport_logistics/)[Finance: banking, insurance, markets](https://www.materialinsights.org/industries/finance/)**Examples:** Home Depot, Travis Perkins, Kingfisher ## Other sections - [Overview](https://www.materialinsights.org/industries/wood_products/index.md) - [Where ₹100 goes](https://www.materialinsights.org/industries/wood_products/cost-mix/index.md) - [Price links with suppliers](https://www.materialinsights.org/industries/wood_products/price-links/index.md) - [Example story](https://www.materialinsights.org/industries/wood_products/story/index.md) - [Materials drawn on](https://www.materialinsights.org/industries/wood_products/materials/index.md) - [Chokepoints and risks](https://www.materialinsights.org/industries/wood_products/risks/index.md) - [Sources](https://www.materialinsights.org/industries/wood_products/sources/index.md)