IV. The primary wood-using industries

Introduction
The sawmilling industry
The wood-based panel industries
The pulp and paper industry
Prospective developments in the primary wood-using industries

Introduction

The two preceding chapters have considered the nature and evolution of demand for wood and wood products and the nature and extent of the world's forests and their capacity to yield wood. The present chapter examines the primary wood-using industries through which demand for processed wood products is translated into demand for wood raw material. Its coverage is, therefore, restricted to the primary range of industries drawing their raw material directly from the forest - i. e., the manufacture of sawnwood, pulp and paper, plywood and veneer, fibreboard and particle board. Attention is confined to a review of, firstly, the size, structure, distribution and evolution of these industries in the recent past; secondly, the nature of their raw material requirements and the technological and economic developments which are affecting these requirements; and, finally, the effect these developments are likely to have upon the ability of the industries to grow and compete in the future.

Table IV-1 sets out some of the salient features of the main industries. The sawmilling industry is the most important forest industry in terms of gross value of output, producing in 1961 about 13,700 million dollars worth of product out of a total of 29,200 million dollars for all primary forest industries. The pulp and paper industry is nearly as large, producing about 12,900 million dollars worth of product, and together these two industries account for about 90 percent of the total gross value of output from the primary forest products sector. However, in terms of requirements for wood, capital and labor, these industries differ widely. The sawmilling industry uses more than half the total labor force employed and approximately two thirds of the wood raw material consumed by the primary forest industries, as compared with only 30 and 24 percent respectively for the pulp and paper industry.¹ On the other hand, the pulp and paper industry accounts for more than 75 percent of the total capital employed in all primary forest industries compared with 17 percent for sawmilling. Thus, the sawmilling industry is the heaviest user of roundwood and labor, but employs less capital per unit of labor or raw material than any of the other primary forest industries. Sawmilling also produces the lowest value of product per cubic meter of raw material, and pulp and paper manufacture the highest. As is the case with most measures of input-use discussed above, the panel industries fall between sawmilling and pulp and paper with respect to value of output per unit of raw in material.

¹ The share of total roundwood used by the pulp and paper industry is somewhat smaller than the 24 percent share of wood raw material consumed, since this industry utilizes large quantities of wood residues from the sawmilling and other industries.

TABLE IV-1. - RELATIVE IMPORTANCE OF THE WORLD'S PRIMARY FOREST INDUSTRIES, 1961

	Utilization of wood row material¹	Gross value² of product		Investments		Labor force
	%	Million $	%	Million $	%	Millions	%
Sawmilling	69	13700	46.9	8500	17.2	3.2	60.3
Paper and paperboard	24	2900	44.2	38300	77.4	1.6	30.2
Plywood	5	2000	6.8	1800	3.6	0.4	7.6
Fibreboard and particle board	2	600	2.1	900	1.8	0.1	1.9
TOTAL	100.0	329200	100.0	49500	100.0	5.3	100.0

¹ Wood raw material equivalent of output. - ² At 1960 prices. - ³ Excluding the value of all other industrial wood (including pitprops) which amounted to about $1,600 million.

Because this chapter will be principally concerned with the rate and nature of change in the various industries, it is important to keep in mind their relative sizes within the group of wood-using industries as a whole. In other words the sawmilling industry, though it is growing very slowly, and in some areas is even declining in size, is still the biggest industrial user of wood; while the panel producing industries, though growing very fast, are still by comparison very small. The reasons behind the different growth rates and absolute levels of production of the individual industries are many and varied. They have partly been explained in Chapter II by factors on the demand side, and this chapter will consider the varying positions of the products in terms of the industries producing them.

Owing to the marked differences between them, the major industries are reviewed separately. But their common raw material base - in terms of both complementarities in wood use and competition for wood resources-gives rise to a number of interrelationships which, together with the problems and prospects facing the industries in the period to 1975, are considered in the last part of this chapter.

The sawmilling industry

Production and trends in production
Size and structure of sawmilling industry
Raw material costs
Processing yield
Labor costs and productivity
Economies of scale
Product development and marketing
Conclusion

The sawmilling industry is the oldest and the most widely established of the wood-processing industries. In its simplest form it requires very little in the way of capital or skills and can be competitively operated on a very small scale; consequently almost every country in the world supports some measure of sawmilling activity.

Production and trends in production

In 1960-62 estimated total world production² of sawnwood averaged about 346 million cubic meters a year, of which a little more than three quarters was coniferous sawnwood. Recorded annual production in 1960-62 was 10 percent higher than in 1955-57 and 28 percent higher than in 1950-52. An average annual rate of growth of output of 2.4 percent between 1951 and 1961 consequently had slowed down to 1.9 percent between 1956 and 1961.³ In Chapter II it was seen that in many countries, in particular the high-income, high-use countries, sawnwood has in fact been losing ground to other materials in many of its traditional end-uses. However, as is shown in Table IV-2, growth rates in the various parts of the world differed widely. Even in the principal producing countries developments during that period were very different.

² As was noted in Chapter II recorded production has been adjusted wherever necessary to allow for other, unrecorded, production. The adjusted figures are referred to as " estimated total production." (For explanation, see Appendix.) As can be seen from Annex Table TV-A unrecorded production is significant only in parts of Africa and Asia.

³ Throughout the study, figures for 1951, 1956 and 1961 are average annual values for 1950-52, 1955-57 and 1960-62, unless otherwise stated.

	1960-62 estimated production (1000 m³)	Percentage of total world production
U.S.S.R	104 780	30
United States	77 072	22
Japan	28 900	8
Canada	20 190	6

TABLE IV-2. - RECORDED PRODUCTION OF SAWNWOOD, 1950-52 TO 1963¹

	Recorded production				Average annual rate of change
	1950-62	1956-67	1960-62	1963	1961-01	1956-61
	1 000 m³
Europe	61275	67919	72440	71693	+ 1.6	+ 1.3
U.S.S.R.	55324	77933	104780	105000	+ 6.6	+ 6.1
North America	107120	105384	96754	104475	- 1.0	- 1.7
Latin America	12600	13177	12509	12001	- 0.1	- 1.0
Africa	1525	2064	2627	2743	+ 5.6	+ 4.9
Asia-Pacific	29549	44236	52172	59288	+ 5.8	+ 3.4
WORLD TOTAL	267393	310713	341282	355200	+ 2.4	+ 1.9

¹ See also Annex Table IV-A.

In 1960-62 about 65 percent of world production was concentrated in the above four countries. Between 1956 and 1961 production in the United States actually declined, and output in Canada grew very little, reflecting the declining position of sawnwood in these high-income high-use economies. But in the U.S.S.R., where use is equally high, production grew by an average annual rate of 6.1 percent during the same period, apparently in response to the rapid growth in the country's economy, a fast growth in exports, and the concurrent lag in the output of alternative construction and packaging materials. But this rapid growth of production in the U.S.S.R. actually took place mainly in the early years of the period, for production leveled off by 1959, seemingly due as much to increasing problems of raw material procurement as to the increasing availability by that time of wood-based panel products and other alternative materials.⁴ Growth of sawnwood output in Japan was also rapid, increasing by more than 6 million cubic meters between 1956 and 1961 and accounting for about 95 percent of the regional growth. Again a fast-growing economy and a persistent high use of sawnwood seem to have been the stimuli.

⁴ Since 1959 the level of output of sawnwood in the U.S.S.R. has been practically unchanged and Soviet plans show only minor increases for the years immediately ahead.

In Europe, over one third of the growth in production during this period occurred in northern Europe; western and southern Africa accounted for almost all of Africa's increase; and in Latin America, where output actually declined between 1956 and 1961, Brazil and Mexico accounted for the major decreases which more than counterbalanced the moderate increases in most of the other subregions.

Although sawn softwood accounted for the greatest share of production in 1960-62, as it did in 1950-52, the output of sawn hardwood grew more than twice as fast over the decade, from 56.49 million cubic meters in 1950-52 to 71.96 million in 1960-62. Not only were there substantial advances in production in the principal tropical hardwood producing areas, such as western Africa and parts of southeast Asia, but also there was a marked shift toward cutting more hardwood in a number of areas with restricted conifer supplies, notably in eastern Europe and Japan. Japan's output of sawn hardwood increased rapidly during the decade, and it became by the early 1960s one of the world's largest sawn hardwood producers (see Annex Table IV-A).

Size and structure of sawmilling industry

Table IV-3 summarizes the information available on the number of sawmills in the world. But to be at all meaningful such figures have to be qualified by data on the range of mill types and sizes. Some idea of the range in mill sizes in a developed country is obtained from the data available for the United States. In 1962, the 28,835 smallest mills in that country (88 percent of all the mills) accounted for only 13 percent of the sawnwood output, while the 74 largest mills accounted for 20 percent of the country's production. This type of size and production distribution is also found in Europe and the U.S.S.R. and is common to a greater or lesser degree for the industry everywhere in the world: a multitude of small mills, but with a small number of much larger mills accounting for a large part of total production. In the developing areas, in contrast with the developed areas, hand-sawyers may also be important. It has been estimated that in the Asia-Pacific region hand-sawing was providing a possible 125,000 man-years of employment annually in the mid-1950s, and in some subregions accounted for an important share of total output. In south Asia, for example, handsawn wood accounted for approximately 50 percent of total production in the middle 1950s. In Africa, in the early 1960s, Madagascar and Nigeria produced respectively 58 and 30 percent of their total sawnwood by hand.

An oft-quoted feature of the sawmilling industry in many regions is its over-capacity. However, the standard concept of rated capacity is often quite inappropriate to much of the sawmilling industry. Many of the smaller mills were never intended for more than intermittent, often seasonal, operation to supplement other activities or serve small local markets. The capital invested in them generally accounts for a small part of the total cost of their output, so they can operate economically in this fashion. In many areas, however, there is over-capacity in the accepted sense, usually due to a decline in, or exhaustion of, economically accessible log supplies. Again it often remains possible to keep these mills operating intermittently or well below: capacity. The point to note is that neither form of over-capacity necessarily implies, as is so often assumed, an ability to achieve sudden and substantial increases in output in response to an increase in demand the present excess capacity in the industry is generally wrongly located with respect to available supplies of raw material as well as demand.

TABLE IV - 3. - APPROXIMATE NUMBER OF SAWMILLS IN THE WORLD, BY REGIONS

	Number of mills	Date of estimate
Europe	35 000 - 36 000	late 1950s
U.S.S.R	41000 (frame saws)	late 1950s
North America	36 000	early 1960s
Latin America	19 000	1961
Africa	1 000	early 1960s
Asia-Pacific	43 000	1955

SOURCES: United States: Current Industrial Reports, Series: MZ4T (63) - 1, U.S. Dept. of Commerce, Bureau of the Census.

U.S.S.R.: E. Buchholz, Die Waldwirtschaft und Holzindustrie der Sowjetunion, 19 61.

Canada: Sawmills, 1961. Dominion Bureau of Statistics.

Other regions: FAO regional timber trends studies.

Raw material costs

Typically the costs of sawlogs delivered at the mill account for 50 to 70 percent of production costs. The economics of the industry's operation is therefore dominated by its raw material supply and the cost of its procurement.

The costs of sawmilling in any given situation are very largely determined by the types of wood being processed, and the type of forest from which the logs are obtained. For example, conifer forests or plantations generally provide a concentrated, homogeneous supply of uniform logs of small to medium size which can be mechanically handled and sawn to standard sizes. At the other extreme, virgin stands of tropical hardwoods produce a low area yield of commercial woods from a heterogeneous mixture of species in large unevenly sized logs which must be individually handled and sawn. These differences markedly affect the cost structure of the industry in terms of transport and logging costs, which account for the greater part of the delivered cost of the wood raw material, and in terms of processing costs within the mills. As topography also has an important bearing on logging and transportation costs, much of the variation in the size, structure and productivity of the sawmilling industry in the different parts of the world is in fact a simple reflection of such differences in forest types, topography and climate.

Recent developments in costs of sawlog procuremen have been affected by a number of institutional and technological factors. For example, in many parts of the world the delivered costs of sawlogs are rising in part due to the fact that logging and other woods operations remain labor-intensive and labor productivity has not been rising fast enough to offset rising wage rates. This is particularly critical in countries where labor costs are high and where attention hat already been devoted to achieving such labor-saving advantages as are readily obtained. The scope for further improvements in labor productivity although substantial is more limited than in the developing nations where wages are still low and major known laborsaving techniques can still be introduced.

Secondly, the weight of transportation costs on tote raw material costs has tended to increase as transport distances rise with the progressive depletion of sawlog material in the vicinity of existing milling capacity, and because of growing raw material requirements associated with larger mills. This has been of mounting importance in the U.S.S.R., for instance, where until recently the growing divergence between the concentration of sawmilling capacity in the west and south of the country and of the remaining reserves of standing timber in the north and east caused average hauling distances for forest products to rise steeply.⁵

⁵ Recently, vigorous measures have been undertaken to rectify this imbalance; more new capacity is now being built in the north and east.

Finally, in some countries competition for standing timber has been increasing and this has forced stump-age prices up in relation to lumber price rises. Other cost-raising factors have been higher land values and increased management costs as virgin timber is depleted and managed second growth forests increase in importance.

Processing yield

With the increasing costs of wood comes a pressure to utilize the log more efficiently. Sawmilling is characterized by a very low converting efficiency. The share of the log input which emerges as sawnwood seldom reaches 60-70 percent. The rest is left as slabs, edgings, end-trimmings, shavings and sawdust. Average recovery rates as high as 60 to 70 percent have been reported from Japan. On the other hand, mills sawing teak in Burma were only getting about 35 to 45 percent yields during the middle 1950s. Yields also vary considerably for different species within the same country. The range for Yugoslavia, for example, is from 48 percent for oak sawnwood to about 65 percent for spruce and fir.

But raising the recovery rate does not necessarily improve the economic yield because it might merely mean an increase in the production of the lower grades of sawn product. Rather, improvements come from, for example, more accurate sawing, a reduction in kerf, and cutting the log to better advantage.

Furthermore, the question of yields has been abruptly changed by the growth in demand for sawmilling residues. The growing use of slabs and edgings as raw material for pulp and fibre and particle boards has altered the economics of the industry.⁶ Where such outlets exist it may be more profitable in certain circumstances to cut down the -output of the lower grades of sawnwood and increase the output of pulpable residues. But this is applicable only where outlets for residues exist. Also, the preparation of residues - usually their reduction to bark-free chips - requires capital equipment; hence a certain minimum throughput is necessary before it becomes economic to install such equipment. In the many countries where the sawmilling industry is still small and is not associated with other wood-using industries, these conditions do not usually exist. On the other hand, there are often local markets for even the poorest grades of sawnwood that can be cut from a log, and residues will be sought for fuel. Thus, the: concept of maximum economic yield in the sawmilling industry can only be interpreted within the total context of the raw material, processing, and market situation in which a given mill, or section of the industry, operates.

⁶ Utilization of residues will be discussed further in later sections - of this chapter.

Labor costs and productivity

Output per man-hour varies widely within the sawmilling industry, both between countries and within a country between different types of mills and for different species. Labor requirements can vary all the way from 2 to 3 man-hours per cubic meter in highly mechanized mills in countries such as Finland and Sweden, to as high as 100 or more hours in small mills in some of the African countries. Again, productivity can vary with the type of log being cut, both in terms of sizes and in terms of wood type. In Yugoslavia, for example, labor productivity for hardwood lumber production varies from 8 man-hours per cubic meter all the way to 55 man-hours, while for softwood lumber production the range is only from 6 to 29 man-hours per cubic meter. Because of their more homogeneous log intakes, mills producing coniferous sawnwood offer greater possibilities for mechanization and labor saving than mills sawing hardwood. With such wide variation in labor productivities, clearly it is not wages alone but rather labor costs per unit of output that are important in considering the labor element of production costs. In short, the variability both in productivity and in wages reflect the weight of labor costs in overall production costs.

New and better machines in themselves will increase productivity, but much of the labor in a sawmill is employed outside the mill itself. Sorting and handling are two activities which represent high labor costs and which can offer scope for labor saving. Mechanical sorting devices, and forklift trucks, cranes, straddle carriers, automatic stackers, and similar handling devices have all been introduced into the industry in order to increase productivity.

But the use of equipment of any sort is economical only if there is a sufficient volume of production to ensure its efficient employment, and many mills are too small for this to be possible. Where labor costs are high and rising, smaller mills are consequently at a distinct disadvantage because of their inability to employ labor-saving equipment. But in the parts of the world where labor costs remain low the competitive advantages of mechanization and automation are less likely to be critical and small mills are more likely to be able to remain a viable element in the industry.

Economies of scale

There are economies of scale in the sawmilling industry, but they are seldom as decisive as in other wood-processing industries. This is due partly to the nature of the equipment used in the industry and partly to balancing diseconomies. Most of the economies of scale are of the secondary nature mentioned above - namely the need for a certain minimum size of mill to allow the economic use of residue-preparing and laborsaving equipment. Therefore, scale economies tend to be important only in those countries where there is a market for residues and where there are pressures to save on labor costs.

In the developed, high-wage countries substantial improvements in economic efficiency have been achieved by increasing average size of output through, for example, mergers, consolidation, and changes in equipment. These changes have generally been accompanied by decreases in the number of mills. In Canada, for example, between 1953 and 1958 the number of sawmills decreased by 1,200, the number of employees fell by one quarter, while the overall productivity increased by 5.5 percent and man-hour productivity increased by about 30 percent. In such cases, where large mills have been considerably increasing their efficiency and productivity, small mills have been having a difficult time competing. In other words, even in those countries where the aggregate size of the industry, in terms of volume of output, has been growing very little, if at all, there have been considerable shifts in its structure - with the larger, more modern mills growing at the expense of the smaller, more labor-intensive plants.

In the centrally-planned economies of the U.S.S.R. and eastern Europe some very large mills have recently been constructed or planned. In the case of Romania, for example, the sawmills in the large new wood-using industrial complexes (combinats) have an annual output of from 100,000 to 200,000 cubic meters per year. But this type of development is rare for the rest of the world. Generally speaking there are few economies of scale to be gained from expansion beyond a capacity of 20,000 cubic meters. Mills larger than this size will often encounter diseconomies of scale in the form of increased wood procurement cost and rising transportation and marketing costs. Thus, the larger mills are generally confined to those sectors of the industry serving export markets, and are usually located in heavily forested areas.

Product development and marketing

It has been pointed out that the sawmilling industry faces a number of market problems and that, in many regions, it must look to prospects for only sluggish growth, or even decline, in demand. This situation results from competition with newer wood and nonwood products which have more favorable market positions due to cost advantages and better adaptability to moddern use requirements.

In large part, the competitive position of the sawmilling industry has deteriorated because, due to its very structure, the industry has in the past devoted little of its returns to systematic research into new or improved processes or products, or to the expansion and improvement of its marketing structure. The heavy capital requirements of research and development programs mean that only large companies, co-operatives, or governments can afford such activities.

Some of the market problems result from the relatively inflexible nature of sawnwood itself: there are limitations to the way sawnwood may be produced or used. Generally, consumers find themselves faced with a narrow range of sawnwood products which they must themselves adapt to their needs. Often, marketing problems are further magnified, especially in the developing countries, by a lack of standardization of products.

Nevertheless, there are many cases where large mills, or groups of mills under joint ownership, have undertaken aggressive product development programs. In other instances trade associations or co-operatives have provided some of the advantages of size in market analysis and sales promotion. These efforts have resulted in a number of product improvements, such as more effective preservative treatments, including the development of fire-resistant treatments, and better and more effectively applied grading standards. There have also been some notable new or improved applications of sawnwood, such as sawnwood pallets for use in the new goods handling systems, and properly engineered sawnwood roof trusses ⁷ and laminated sawnwood beams and arches. There has also been a marked trend in the more advanced sectors of the industry toward integration forward into the next stage of processing in order to provide a more highly finished product, better tailored to the requirements of the market. An important step forward in the marketing of sawnwood has been the development of bundle packaging systems which substantially reduce handling costs.

⁷ The design savings introduced in this and other uses of sawnwood have of course contributed to the present check in the growth in the overall volume used. But by improving its competitive position vis-à-vis alternative materials this rationalization of its use should in the long run enhance demand for sawnwood.

But, as these developments are in the main economically attractive only where large volumes of sawnwood are involved, they have in general been confined to a small number of major producing countries, and to only some sectors of the industry within each of these countries. In the face of the sluggish demand for sawnwood the effect of these developments has so far been more to accelerate the shift within the industry from small labor-intensive units to large, mechanized mills than to influence its aggregate level of output.

Conclusion

The sawmilling industry remains the largest and most varied of the primary wood-using industries, but recently its growth has been very slow. Its highly fragmented structure and the small units which make up much of the industry tend to be appropriate only to the situation in which they arose small local markets, cheap raw material and/or low labor costs. These conditions still obtain in much of the world. But, in the advanced, high-cost countries, which produce most of the world's sawnwood, fast-rising costs and heightening market competition from other materials which are more flexible in use are pressing heavily upon the industry. It is responding by mechanizing production, by improving, diversifying and promoting its product, and by finding outlets for its residues - all developments which call for larger, more heavily capitalized mills, better integrated with the rest of the complex of wood-using industries. However, such advances have so far been introduced into only a limited part of the sawmilling industry, and even then have seldom been in effect very long.

The wood-based panel industries

Production and trends in production
Economics of production
Conclusion

The three major product groups produced by the wood-based panel industries are plywood, fibreboard, and particle board. The plywood group includes veneer and blackboard; within the fibreboard group a distinction is generally made between compressed and noncompressed fibreboards.

Veneer is produced by peeling or slicing logs into thin sheets, and plywood is formed by gluing together three or more sheets of veneer so that the grain of alternate sheets runs at right angles. Compressed fibreboard is formed by pressing wood fibres into sheets, the fibres being usually but not always produced by a mechanical pulping process. Noncompressed fibreboard is essentially made of the same raw materials combined into sheets without pressure; the end product is a fairly thick soft panel. Particle board is also a sheet material, but formed by pressing wood chips together with a bonding agent.

Production and trends in production

Production of each of the three major wood-based panel products has increased rapidly over the period since 1950 and has outpaced growth in production of most other wood products. The figures in Table IV-4 indicate the growth in average annual production between 1950-52 and 1963. Growth of the major board products also varied widely between the different regions of the world, as indicated in Table IV-5.

TABLE IV-4. - RECORDED WORLD PRODUCTION OF WOOD-BASED PANELS,¹ 1950-52 TO 1963

	1950-52	1955-57	1960-62	1963	Percent increase 1956-61
Plywood (1 000 m³)	6800	11302	16840	20208	49
Fibreboard (1 000 M.T.)	2203	3304	4620	5321	40
Particle board (1 000 M.T.)	39	562	2308	3569	318

¹ Excluding veneers not used in the production of plywood.

PLYWOOD

Recorded world production of plywood grew by about 148 percent during the period 1951-61 to 16.8 million cubic meters in 1961, and reached 20.2 million in 1963.⁸ Throughout the period the United States accounted for more than half the world's output, but its growth in production during the decade of about 5 million cubic meters was entirely in softwood plywood, a thick rigid construction panel material. United States production of hardwood plywood actually declined during the period. On the other hand, in Japan, by 1960-62 the second largest producer of plywood in the world, production was nearly all hardwood plywood. Output rose very rapidly to 10 percent of the world plywood production in 1960-62, partly owing to a fast-growing export of hardwood plywood, largely to the United States.

⁸ Production of blackboard is included in the figures of plywood production.

A substantial rise in Europe's output, to 17 percent of the world aggregate in 1960-62, was largely due to a number of industries in western Europe drawing, as did Japan's industry, upon imports of tropical hardwood logs for much of their raw material. Growth in plywood production in the U.S.S.R. was only moderate during the decade compared to growth in other areas of the world. Production rose by 85 percent between 1951 and 1961 to 1.4 million cubic meters in 1960-62. Canada's growth during the decade was substantial, with an average annual production increase of 13 percent, reaching a production of 1.1 million cubic meters in 1960-62.

Elsewhere in the world developments were perhaps most significant in those areas of southeast Asia and western Africa which have been principal suppliers of hardwood veneer logs for export. Production of plywood in the Philippines rose rapidly from 14,000 to 354,000 cubic meters between 1951 and 1963.9 In western Africa production of plywood rose from 24,000 to 132,000 cubic meters in the same period. Growth in plywood production in east Asia (excluding Japan) was also rapid, amounting to some 30 percent annually over the decade, and reaching an output of 232,000 cubic meters in 1963. As in Japan, east Asian mills draw principally on imported log raw material.

⁹ Production and growth of production of veneer wore also substantial in these areas. The Philippines, for example, exported 57,000 me of veneer sheets in 1960-62. This is about three times as much as they exported in 1955-57.

TABLE IV-5. - RECORDED PRODUCTION OF PLYWOOD, FIBREBOARD AND PARTICLE BOARD BY REGIONS, 1950-52 TO 1963¹

	Production				Average annual rate of growth
	1950-52	1955-57	1960-62	1963	1951-61	1956-61
PLYWOOD	1000 m³				Percent
Europe	1478	2035	2798	3250	6.6	6.5
U.S.S.R.	769	1109	1423	1544	6.3	5.1
North America	3990	6658	9769	11783	9.3	8.0
Latin America	142	217	324	337	9.1	8.3
Africa	33	85	133	164	14.9	9.3
Asia-Pacific	388	1198	2393	3130	19.9	14.9
WORLD TOTAL	6800	11302	16840	20208	9.5	8.3
FIBERBOARD	1000 metric tons
Europe	770	1300	1935	2233	9.6	8.3
U.S.S.R.	24	71	269	349	27.3	30.5
North America	1298	1670	1886	2133	3.8	2.5
Latin America	14	46	106	126	22.4	17.8
Africa	13	55	68	79	18.0	4.4
Asia-Pacific	84	162	356	401	15.5	17.1
WORLD TOTAL	2203	3304	4620	5321	7.6	7.0
PARTICLE BOARD
Europe	27	372	1594	2494	50.5	33.7
U.S.S.R.	-		167	280	2 -	..
North America	12	167	420	617	42.7	20.3
Latin America	-	5	31	52	2 -	45.1
Africa	-	10	7	5	2 -	- 7.0
Asia-Pacific	-	8	89	121	2 -	60.0
WORLD TOTAL	39	562	2308	3569	50.4	32.7

¹ See also Annex Table IV-B. - ² Regional production started after 1950-52.

FIBREBOARD

In aggregate, recorded production of fibreboard rose by 111 percent in the ten years to 1960-62, to 4.6 million metric tons a year, but there was a marked difference between the growth in production of compressed and noncompressed fibreboard. Recorded world outputs: of compressed fibreboard (2.9 million metric tons a year in 1961) rose by 180 percent between 1951 and. 1961, while that of noncompressed fibreboard (1.7 million metric tons in 1961) only grew by 50 percent. Europe, with a production of 1.5 million metric tons, was the principal producer of compressed fibreboard, accounting for 53 percent of total world output in 1960-62 and 54 percent of the growth in output over the previous decade. Output in the other large producer, North America, also rose substantially, increasing by 97 percent to a 1960-62 production of 770,000 metric tons, and accounting for 20 percent of the world increase in production of compressed fibreboard. Production in the U.S.S.R. and Japan is still quite low, though rising fast. Many developing areas, notably Brazil, insular southeast Asia, and South Africa, also registered rapid growth in production of this product.

About two thirds of the world's output of noncompressed fibreboard is produced in North America. But, as was noted in Chapter II, the level of use in this region has not been growing, and production hardly rose at all during the decade. Only in the U.S.S.R. and eastern Europe were there substantial increases in output.

PARTICLE BOARD

In 1950-52 the particle board industry was in its in-fancy. By 1955-57 output was still only significant in Europe and North America, and recorded world production amounted to merely 600,000 metric tons. By 1960-62 recorded output had reached 2.3 million metric tons, and by 1963, 3.6 million - an average annual rate of growth of 33 percent since 1956. In 1961, about 70 percent of the world output was produced in Europe and about 20 percent in North America. But production is now spreading elsewhere in the world and is growing particularly rapidly (about 60 percent between 1961 and 1963) in the U.S.S.R. (8 percent of world output in 1963).

Economics of production

PLYWOOD AND VENEER

In many parts of the world, the plywood industry is not a particularly capital-intensive one. Investment costs are generally higher than in sawmilling but much lower than in pulp and paper manufacture, and they can differ widely with the type of raw material and product involved. Investment costs per unit of output can also vary considerably with mill capacity.

The most important element in the economics of the plywood industry is the cost of raw material. Traditionally it has been the most exacting of wood-using industries in its wood requirements, using where possible large diameter, high-quality logs of good form, with good peeling, gluing and finishing properties, and desirable appearance and structural characteristics.

In recent years some success has been achieved in widening the range of species that can be processed and much of the expansion in the use of plywood has been in utility grades, requiring raw material of less rigorously high standards.

Success has also been achieved in broadening the raw material base of the industry through the use of the telescopic spindles and other processing developments which brought into use species available only in small diameters. In Europe, small diameter logs have been utilized for some time. For example, the average diameter of the veneer logs used by the important Finnish birch plywood industry is only 23 centimeters. However, smaller diameter veneer logs give a lower percentage yield and require a higher number of working hours per unit of output. The advantage lies in the low cost of the log raw material.

The successful expansion of plywood production based on small-sized logs reflects the rising delivered costs of the large-sized, high-quality logs. But the bulk of the world's production is still based upon the few species that satisfy the large-size, high-quality requirements set out above. The following figures indicate the approximate share of production for the major groups of species:

	%
Douglas fir	47
Birch10	13
Lauan group11	9
Beech	3
Okoume	3
Other species	25

¹⁰ Includes alder in the U.S.S.R.

¹¹ Includes Shorea spp. and Hopea spp.

TABLE IV-6. - AVERAGE SIZE AND NUMBER OF PLYWOOD MILLS IN SELECTED COUNTRIES

	Number of mills	Average e output per mill	Year of reference
Canada - United States		m³
Hardwood plywood	164	15 700	1961
Softwood plywood	150	49 800	1961
Finland	24	16 300	1960
France	44	7 840	1959
Germany, Fed. Rep. of	124	4 010	1959
Sweden	20	3 000	1959
Argentina	34	1 100	1960
Mexico	9	4 300	1960
Brazil	13	4 300	late 1950s
South Africa	2	3 500	1960
Japan	217	5 900	1960
Australia	50	2 100	1961

SOURCE: Plywood and other wood-based panels, FAO, 1965.

¹ Refers to capacity.

Since the wood requirements are rather rigid, the raw material supply pattern has had a major influence on the development of the industry: both on its size and its rate of growth as well as on its location and structure. Table IV-6 shows the average mill size and the numbers of mills in most of the more important producing areas. Mill size is closely associated with the economic availability of the raw material, with large mills requiring a large supply of uniform logs. To obtain such supplies many of the larger mills in the world have increasingly come to depend upon imported logs. Hence, much of the industry's expansion has been located so as to have easy access to port facilities. The plywood and veneer industry is in fact heavily dependent upon, and influenced in its location by, trade in raw materials and products. Outside North America and the U.S.S.R., 24 percent of the world plywood production was exported, and 43 percent of the plywood manufactured was made from imported logs. Table IV-7 shows the extent to which the output of the principal producing areas is based upon imported raw material.

Although there have been no new revolutionary developments in plywood processing technology, productivity has in recent years been greatly improved in the more advanced sectors of the industry. Lathe capacities have been much increased, recovery rates improved, machine speeds stepped up, and drying times reduced, while mechanization and automation are rapidly improving methods of jointing, assembling, pressing, and finishing.

The improvements have been most marked in the export-oriented and in the United States softwood sectors of the plywood industry, where uniformity of raw material facilitates mechanization and where the large size of throughput permits the economic operation of modern equipment. There has been a clear tendency in these areas to increase mill size in order to effect improvements. Between 1950 and 1960 the average size of softwood plywood mills in the United States grew by about 50 percent, the new mills having capacities of about 50,000 cubic meters per year. In Japan the number of mills has been reduced by about one third since the late 1940s, while total production, and consequently average production, has been increasing rapidly.¹² In Finland, an important producer and exporter, labor productivity increased by about 30 percent -during the 1950s.

¹² It is also noteworthy that in Japan, where the average capacity of all plywood mills was 5,900 cubic meters the export mills had annual outputs ranging from 8,000 to 90,000 cubic meters.

The pressures to realize potential economies of scale seem to be less pronounced in plywood mills primarily devoted to serving domestic markets. In such technically and economically advanced countries as Sweden and the Federal Republic of Germany, average mill outputs in 1959 were respectively only 3,000 and 4,000 cubic meters per year. Many of these mills tend to be based on limited domestic supplies of raw material and serve small and often specialized markets. But the pressures of dwindling log supplies, rising labor costs, and severe competition from other panel products must in due course increasingly favor mechanized and therefore larger mills. There is already evidence that many of the smaller mills in Europe, for instance, are not large enough to be competitive.

Small mills are likely to continue to have a place in wood-rich, low wage countries, but it must be noted that in Latin America, a region where the plywood industry is characterized by a large number of very small units, difficulties have already been encountered. With rising labor costs, declining supplies of raw material economically available to existing plants, high glue costs, and a product of variable quality and market reputation, production in some countries has actually been declining, as is evidenced in Argentina, where production decreased from 44,000 cubic meters in 1960 to 35,000 cubic meters in 1964, and in Chile, where production decreased by 5,000 cubic meters between 1950 and 1964, from 11,000 to 6,300 cubic meters.

The yield in plywood manufacture is fairly low, losses in conversion amounting to 50 to 70 percent (40 to 60 percent in veneer manufacture). Unless economic outlets can be found for residues, increasing transportation distances for logs can rapidly increase per unit production costs.¹³ Procurement problems are also growing in the tropical countries supplying veneer logs to the world market. The costs of logs imported into Europe have been rising quite steeply.

¹³ The trend toward establishing nonintegrated veneer plants, making green or dried veneer for shipment to plywood plants, deserves notice here. Such veneer mills require little investment, and can operate on a limited supply of logs. Given the massive dependence of much of the world's plywood industry on imported raw material this is of twofold interest: shipment of veneers rather than logs is much more efficient due to the substantial loss of weight and volume during the peeling process, and veneer production can be much more easily established in the developing countries rich in veneer log material than can plywood manufacture.

TABLE IV-7. - IMPORTANCE OF LOG RAW MATERIAL IMPORTS FOR DIFFERENT PLYWOOD INDUSTRIES, 1960

	Total wood raw material (roundwood equivalent) 1 000 m³ ®	Imported logs as percentage of total wood raw material¹
Europe	6 500	34
of which:
France²	805	76
Germany, Fed. Rep. of3	956	65
U.S.S.R	3 900	-
North America	19 700	1
Asia	4 300	63
of which:
Japan	3 250	84
Pacific	350	43

SOURCE: Plywood and other wood-based panels, FAO, 1965.

¹ FAO estimates. - ² Etude du marché des bois tropicaux, Ministère de la coopération, page F 79. - ³ Ibid., page D 30.

Blockboard

Mention must also be made of production of blockboard which is included in the production statistics of plywood even though the manufacturing process is quite different.¹⁴ Production of blockboard is well suited to small-scale, labor-intensive operations: it can be manufactured with very limited equipment, so it is well adapted to the early stages of development where capital and skills are scarce. The recent development of a mechanized continuous manufacturing process should enable it to remain competitive even in the developed countries.

¹⁴ Table IV-8 indicates that growth in blockboard production has been quite rapid in most of the few European countries for which adequate data are available.

TABLE IV-8. - GROWTH OF BLOCKBOARD PRODUCTION IN SELECTED EUROPEAN COUNTRIES

	Production in 1 000 m³ (years in parentheses)		Average annual rate of growth for period indicated
Finland	30	1130	14.3
	(1951)	(1962)
France	40	89	22.1
	(1954)	(1958)
Germany Fed. Rep. of.	165	282	8.0
	(1952)	(1959)
Czechoslovakia	86.4	111.2	4.3
	(1953)	(1959)
Romania	6.8	17.9	14.6
	(1951)	(1958)
Yugoslavia	18.0	69.5	40.2
	(1957)	(1961)

SOURCE: Plywood and other wood-based panels, FAO, 1965.

¹ Estimate.

TABLE IV-9. - SUPPLY OF RAW MATERIALS FOB THE MANUFACTURE OF FIBREBOARD AND PARTICLE BOARD IN 1960

	Roundwood		Industrial wood residues		Other fibrous materials
	1000 m³	percent of total¹	1000 m³	percent of total¹	1000 tons	percent of total¹
FIBREBOARD
Europe	1740	40	2580	59	20	1
North America ²	2740	53	650	14	720	33
Asia	160	65	40	14	30	21
Other regions ³	620	69	240	27	20	4
Total	5260	48	3510	35	790	17
PARTICLE BOARD
Europe	1480	49	1120	37	250	14
North America	200	26	580	74	-	-
Asia	90	67	50	33	..	..
Other regions ³	70	80	20	20	..	..
Total	1840	45	1770	44	250	11

SOURCE: Plywood and other wood-based panels, FAO, 1965.

¹Percentage of total raw material supply on basis of weight - ² U.S. data converted from tons of fibre material. - ³ Excluding the U.S.S.R,

FIBREBOARD AND PARTICLE BOARD

Rapid growth in the fibreboard and particle board industries has been brought about by shortages in raw materials for solid wood products, the relatively inexpensive production processes, the uniformity of product quality that can be produced from low-quality raw materials, and the ability of these industries to use small sizes of roundwood and wood residues from other forest industries - notably sawmills and plywood mills - thereby making overall wood raw material utilization more efficient.

The degree to which residues or roundwood are used in each industry varies widely between areas, as is shown in Table IV-9. As indicated, the relative importance of residues as raw material for particle board and fibreboard is quite different in North America and Europe. In the case of fibreboard, Europe obtains 59 percent of its raw material from residues, mainly due to roundwood shortages and an unfavorable cost position for the industry, while North America, on the other hand, obtains only 14 percent of its raw material from residues, primarily because of a more favorable roundwood supply and cost situation. In the case of particle board, the situation is reversed. North American raw material input is 74 percent wood residues while for Europe this percentage is only 37. This is mainly because residues from sawmills and plywood mills in North America tend to give the type of high-quality flake or particle needed for good particle board, while the smaller average log size processed in European sawmills produces residues which are not as well suited for this purpose. The fact that the particle board industry is able to compete more strongly for small-sized roundwood than the fibreboard industry also contributes to its greater use of this raw material in Europe. As is shown in Table IV-9 a large proportion (33 percent) of raw material for fibreboard production in North America is in the form of " other fibrous materials, " in the main bagasse obtained in the southeastern United States.

The fibreboard and particle board industries compete for most of their raw materials with the pulp and paper industry. Though they have the advantage of being able to operate economically with smaller wood supplies and to use raw material of poorer quality, they nevertheless, in many of the principal producing countries, face intensifying competition for raw materials, so that costs are tending to rise. Attention in these industries, as in the other forestry products industries, has consequently been directed to reducing or limiting other costs.

TABLE IV-10. - ECONOMIES OF SCALE IN SCANDINAVIAN FIBREBOARD PRODUCTION, 1962

Mill capacity (tons/year)	4 700	9 400	18 800
	$/ton	$/ton	$/ton
Wood	21.6	21.6	21.6
Chemicals	10.5	10.5	10.5
Electric power	5.0	5.0	5.0
Steam	10.8	10.8	10.8
Labor	35.2	19.4	11.2
Supplies and materials	4.6	2.8	2.3
Administration	6.8	3.4	1.8
Total	94.5	73.5	63.2

SOURCE: Plywood and other wood-based panels, FAO, 1965.

TABLE IV-11. - SWEDISH FIBREBOARD INDUSTRY: PRODUCTION COSTS TRENDS

	Raw materials	Purchased fuel	Purchased electric power	Salaries admin. Personnel	Wages of workmen
	Costs as percentages of sales value
1947	38.4	8.1	2.9	2.1	13.8
1950	37.7	6.9	2.6	1.8	14.1
1951	43.4	6.4	3.3	1.4	11.5
1953	43.9	7.4	3.9	3.2	19.7
1955	39.5	7.9	3.7	2.7	16.8
1957	42.9	9.0	5.1	3.6	17.8
1960	39.4	6.3	5.3	3.9	18.4
1961	42.8	5.4	6.1	4.1	19.2
1962	40.8	4.6	6.5	4.3	17.9

SOURCE: Extract from special report published in Kommersiella Meddelanden, Board of Trade (1954): 1,17. Table supplemented Reproduced in part from Fibreboard industry and trade, Defebrator AB, Stockholm, 1965, p. 61.

NOTE: Maintenance and depreciation of buildings, machinery fixtures, goods in stock, insurance, taxes, dues and certain " social" costs are not reported. Hence data extracted do not justify any conclusions as to profits, etc.

TABLE IV-12. - CAPACITY DISTRIBUTION OF FIBREBOARD MILLS: 1960, 1964

SOURCE: Fibreboard industry and trade, Defibrator AB, Stockholm, 1965, and Plywood and other wood-based panels, FAO, 1966.

The fibreboard industry is a relatively capital-intensive industry, and there are appreciable economies of scale, but in the range of plant sizes being built at present in the main producing countries it is the economies in labor, administration, and marketing costs which are decisive. As is shown in Table IV-10 these economies can be substantial.¹⁵ The keen competition in this industry in Europe and North America, stemming in good part from a substantial and persistent over-expansion of capacity, has heightened the pressures to exploit economies of scale to the fullest. As indicated in Table IV-12, the mills built in Europe, Asia and South America between 1960 and 1964 were on the average larger than the mills existing in 1960, while the mills built in the United States during this period were about the same size as those existing in 1960. (This is partly due to the fact that the average mill size in the United States in 1960 [48,400 metric tons] was a little over twice the size of the average European mill and there was consequently less incentive for expansion in the United States since the major economies of scale are achieved in the lower range of mill sizes.)

¹⁵ As indicated in Table IV-11 the relative importance of the major production cost items has also been shifting over time in such countries as Sweden.

As is to be expected, smaller mills are found in the developing regions where markets are smaller and there is less, if any, competition for wood raw material or from other panel materials, and labor costs are lower. A distinction must also be made in the larger producing countries between export-oriented plants and those serving the domestic market: the competitive pressures to maximize economies will be greater in the former, and the plants are therefore likely to be bigger.

The capital requirements of the particle board industry are, for mills of comparable capacity, only about two thirds as great as for fibreboard mills. Though economies of scale are appreciable, the average size of mill is small, as indicated in Table IV-13 for Europe. This is partly due to the fact that a large part of the industry consists of plants serving " captive" markets: with an assured market, or relatively cheap raw materials, small plants may be viable.

But the principal reason for the small average size of particle board plants is the newness of the industry. Recently, as technologies have improved - and as the markets have grown - the average size of output of market mills has been growing in the more advanced countries, as is indicated by the figures for the Federal Republic of Germany in Table IV-14. Productivity has increased rapidly with size, in part due to much faster press cycles, so that the output of existing machines has also been stepped up. At the same time, simpler, cheaper plants with single-opening presses have been developed, lowering the minimum economic size of plant for the many situations where limited domestic markets and low costs of raw material justify it. Much of the potential of the particle board industry would seem to be in its ability to operate competitively on a small scale and with low grade raw materials.

TABLE IV-13. - CAPACITY DISTRIBUTION OF PARTICLE BOARD MITES IN WESTERN EUROPE (19 COUNTRIES), 1962

Capacity (m³/year)	Number of mills	Percent of all mills
0-10 000	100	50
10-20 000	53	26
20-30 000	23	11
30-40 000	10	5
40-50 000	6	4
50 000 or more	6	4

SOURCE: Plywood and other wood-based based panels, FAO, 1965.

TABLE IV-14. - GROWTH OF THE PARTICLE BOARD INDUSTRY IN THE FEDERAL REPUBLIC OF GERMANY, 1954 TO 1961

	1954	1956	1958	1960	1961¹
Number of particle board plants	28	44	58	66	69
Production (thousand m³)	97	280	525	875	1000
Output per plant (thousand m³)	3.46	6.36	9.05	13.26	14.49
Number of workers	1020	2200	3100	3900	..
Output per worker (m³)	95	127	170	224	..

SOURCE: UN/FAO. European timber trends and prospects, 1964.

¹ FAO estimate.

Conclusion

Growth of all three of the wood-based panel industries has been rapid over the past decade owing to substantial technological improvements both in products and processes which have helped the industries to compete effectively for markets and raw materials. The panel industries, owing to the lower cost in use and more uniform product standards of their products, have moved into new markets as well as those that were previously held by the lumber industry. Fibreboard and particle board have also been favored by their extreme flexibility in raw material requirements and in the diversity of their products and the ease with which they adapt to changing needs. Their ability to utilize wood residues from other forest industries and to operate economically on small-sized, often poorquality roundwood has ensured them a generally favorable position in countries where wood raw materials are scarce and expensive and where efforts are being made to rationalize the use of existing wood resources. The generally small economically viable size of plant has also permitted the fibreboard and particle board industries to thrive and grow in the face of mounting competition for wood raw materials from the pulp and paper industry. The plywood industry, despite its much more demanding raw material requirements, has nevertheless also been successful in adapting to a changing raw material situation, both by widening the range of sizes and qualities it can use and by rapid improvements in the structure and productivity of the industry in order to accommodate rising log costs.

The pulp and paper industry

Production and trends in production
Fibre raw material requirements
Industry economics and economies of scale
Conclusion

Manufacture of wood pulp and manufacture of paper and paperboard can be distinguished as separate processes, but they are so interrelated and often physically integrated as to be considered a single industry. Paper and paperboard production absorbs the great bulk of all pulp products; in turn pulp is the predominant raw material for paper products. The pulp and paper industry is the largest of the primary forest industries in terms of capital invested, having in 1961 some 38,000 million dollars worth of capital employed.

There are a number of pulping processes and many varieties of paper and paperboard for different uses, but for the purposes of this review they can be narrowed down to a few commonly recognized major groupings. The paper groups to be dealt with coincide with those of Chapter II newsprint, other printing and writing papers, and all other paper and paperboard. The latter group, in which industrial papers bulk large, includes most of the kraft papers.

About two thirds of the world's wood pulp is produced by various chemical processes, notably by the sulfate or kraft process. Chemical processes are characterized by the chemical separation of lignin from cellulose, which forms the wood pulp. Chemical pulps are used in a wide variety of papers. Next in importance, in terms of volume of production, is mechanical pulp, which is produced by grinding wood to fibres which still contain all the constituent parts of wood. The resulting pulp yields are thus high (as much as 96 percent of the wood input on a weight basis). Mechanical pulp is used mainly in newsprint,¹⁶ where it normally constitutes 70 to 90 percent of the fibre furnish.

¹⁶ Mechanical pulp is also used in the manufacture of fibreboard.

Intermediate between mechanical and chemical is the relatively new semichemical pulping process. Production of semichemical pulp, although still quite small, is growing rapidly, mainly due to the flexibility of the process in terms of raw material requirements, the high pulp yield obtained, and the relatively low capital investment per ton of product in comparison with chemical pulp.¹⁷ Finally, a quite distinct pulp product is dissolving pulp, a highly purified chemical pulp which will dissolve in chemicals such as acetates. It is mainly used for the manufacture of " textiles " (e.g., acetate and rayon filament yarn, staple fibres and tire cords).

¹⁷ Although the semichemical pulping processes will be considered separately, the production statistics for semichemical pulp are included with those for chemical pulp singe many countries do not distinguish between the two.

TABLE IV-15. - RECORDED WORLD PRODUCTION OF WOOD PULP BY CATEGORIES, 1956-61

	World production (1 000 m. tons)		Percent growth	Percent of total world production
	1956	1961	1956 to 1961	1956	1961
Chemical	32669	43612	33	67	70
Mechanical	15965	18696	17	33	30
All wood pulp	48634	62308	28	100	100

Production and trends in production

WOOD PULP

Total recorded world production of wood pulp in 1960-62 amounted to about 62.3 million metric tons, which was a 73 percent increase over 1950-52 production and a 28 percent increase over 1955-57 production. As indicated in Table IV-15, chemical wood pulp accounted for 70 percent of the total in 1961, and mechanical pulp for 30 percent. Production of chemical pulp grew by about 33 percent between 1956 and 1961 and mechanical pulp only grew by 17 percent. Although it is not shown in the production figures, there was a rapid trend toward increased production of higher yield semichemical pulps; this trend will be discussed in greater detail later.

Wood pulp production is heavily concentrated in a few countries. The United States and Canada (with a 1961 combined production of 34.8 million metric tons) account for more than half of the world production. Finland, Sweden and Japan add another 20 percent of the world total. The developed regions of Europe, the U.S.S.R., North America and Japan as a whole account for more than 95 percent of total production.

As indicated in Table IV-16, production of the different types of wood pulp, and the production in the various regions, grew at widely different rates. Recorded world production of wood pulp grew at an average annual rate of 5.6 percent between 1951 and 1961. Of the major producing countries, Japan's industry showed the greatest growth, averaging 15 percent annually during the decade and increasing production from about 1 million tons in 1951 to about 4 million tons in 1961. North America, with the lowest average annual rate of growth of 4.4 percent during the same period, still had the largest absolute increase in production, amounting to a growth in annual output of some 12 million metric tons. This growth in production was only 5 million tons less than the total European production in 1961 and 3 times the total Japanese production in that year. In other areas, the U.S.S.R.'s industry had a substantial growth from about 1.7 million tons in 1951 to about 3.5 million in 1961, or an average annual rate of growth of production of 7 percent. The northern European countries - mainly Finland and Sweden - increased production from about 6 million tons in 1951 to more than 10 million in 1961.

A survey of planned or expected capacity increases¹⁸ indicates that the six main producers will still in 1968 account for 87 percent of world capacity, as they did in 1960 (see Table IV-17). But while the greater part of the additional tonnage will be installed, as in the past, in North America, capacity will be rising faster, in percentage terms, in Sweden and Finland, and fastest of all in the U.S.S.R., so that these producers will increase their share of the world total, at the expense of the United States, Canada and Japan. The industry is also expected to expand rapidly in some of the smaller producing areas, notably Chile, Brazil, Italy and South Africa.

¹⁸ Wood pulp and paper capacities 1960-68, FAO survey 1965, FAO/ACPP, 1965.

TABLE- IV-16. - RECORDED PRODUCTION OF WOOD PULP, BY CATEGORIES OF PULP
AND BY REGIONS, 1950-52 TO 1963¹

	Production				Average annual rate of growth
	1950-52	1955-57	1960-62	1963	1951-61	1956-61
TOTAL. WOOD PULP	1000 metric tons				Percent
Europe	10186	13720	17895	19745	5.8	5.4
U.S.S.R.	1750	2615	3457	3907	7.0	5.7
North America	22560	29025	34776	37977	4.4	3.7
Latin America	237	334	705	874	11.5	16.1
Africa	23	67	156	228	21.1	18.5
Asia-Pacific	1325	2872	5319	6326	14.9	13.1
WORLD TOTAL	36081	48633	62308	69057	5.6	5.1
CHEMICAL AND SEMICHEMICAL WOOD PULP
Europe	6376	8758	11687	13221	6.3	6.0
U.S.S.R.	1256	1851	2431	2757	6.8	5.5
North America	14790	20010	25127	28109	5.4	4.6
Latin America	102	179	444	528	15.8	19.9
Africa	10	61	137	197	29.9	17.6
Asia-Pacific	697	1809	3786	4669	18.4	15.9
WORLD TOTAL	23231	32668	43612	49481	6.5	6.0
MECHANICAL WOOD PULP
Europe	3810	4962	6208	6525	5.0	4.6
U.S.S.R.	494	764	1026	1150	7.6	6.0
North America	7770	9015	9649	9868	2.2	1.4
Latin America	135	155	261	346	6.9	11.1
Africa	13	6	19	31	3.8	27.9
Asia-Pacific	628	1063	1533	1657	9.3	7.6
WORLD TOTAL	12850	15965	18696	19577	3.8	3.2

¹ See also Annex Table IV-C.

NONWOOD FIBRE PULP

Recorded output of nonwood fibre - pulp grew by about 70 percent between 1956 and 1961, although production only reached 4.1 million metric tons in 1961 and accounted for a mere 5 percent of the total pulp used in paper and paperboard production. As is indicated in Table IV-18 about half of all nonwood pulp was produced in the Asia-Pacific region in 1961 and the fairly rapid growth in nonwood pulp production was mainly accounted for by developments in Asia, parts of Africa and in Latin America, where output of nonwood pulp has been increasing more rapidly than wood pulp. Elsewhere its output grew very little, or even declined, as was the case in North America.

PAPER AND PAPERBOARD

Recorded paper and paperboard production amounted to 77 million metric tons in 1961. This was 74 percent higher than in 1951 and 30 percent more than 1956. As indicated in Table IV-19, newsprint accounted for 18 percent of total production in 1961; printing and writing paper other than newsprint accounted for a further 18 percent, while other paper and paperboard, including the large volume production of kraft and industrial papers, accounted for 64 percent of total production. Between 1956 and 1961, production of all paper and paperboard grew by about 30 percent, with newsprint only growing by 21 percent, while other paper and paperboard grew by 33 percent.:

While wood pulp production is quite heavily concentrated in a few areas, production of paper and paper board is more widely dispersed among the regions of the world, as indicated in Table IV-20. A number of countries, such as the United Kingdom, produce very little pulp but significant quantities in various paper products based on imported pulp. As in pulp production, Canada and the United States are still the major producers but account for less than half of the total paper and paperboard production of the world; and northern Europe accounts for less than 8 percent.

Recorded world production of paper and paperboard grew at an average annual rate of 5.7 percent during the decade. North American production grew from 28 million tons in 1951 to 39 million in 1961, while Europe's production grew from 12 million to 23 million tons during the same period. In Europe, increases in production were greatest in northern Europe (with an increase in output of about 3 million tons and an average annual rate of growth over the decade of about 8 percent), and in the EEC countries, where the industry output grew by about 7.5 percent yearly in the 1951-61 period, or by about 5 million tons. Japan's industry, with an average annual growth rate of 16.5 percent during the decade, increased production from about I million tons in 1951 to about 5 million in 1961.

TABLE IV-17. - ESTIMATED WOOD PULP PRODUCTION CAPACITY,¹ BY SELECTED COUNTRIES AND REGIONS, 1960 AND 1968

	Estimated capacity (1000 metric tons)		Percent growth	Estimated capacity as percent of world total
	1960	1968	1960-68	1960	1968
United States	25274	34785	38	38	34
Canada	11958	17323	45	18	17
Sweden	6555	8760	58	8	9
Japan	847	6753	39	7	7
Finland	3980	7050	77	6	7
U.S.S.R	3213	8600	168	5	8
Latin America	919	2032	121	1	2
Africa	187	751	302	2-	1
Near East	39	138	254	2-	2-
Far East (excl. Japan)	38	336	784	2-	2-
China (Mainland)	600	650	8	1	1
Oceania	491	984	100	1	1
Other countries	9069	12423	37	14	12
WORLD TOTAL	66170	100585	52	100	100

SOURCES: FAO, World pulp and paper capacities 1960-1968, FAO surrey 1965, and country data. ¹ Including dissolving pulp. Including ² Less than one half of 1 percent.

For the world as a whole, it is estimated that paper and paperboard production capacity will increase from 83 million metric tons in 1960 to 123.7 million tons in 1968, or by 50 percent during the period. Table IV-21 presents estimates of capacities in the major producing countries for 1960 and 1968. According to the figures presented in this table, the U.S.S.R. plans by far the largest relative increase in capacity, as was the case with wood pulp capacity.¹⁹ On the other hand, the United Kingdom, which has traditionally been a large producer of paper products, does not expect a very marked increase in capacity. Although the percentage growth figures are low for the United States and Canada, their planned expansion still accounts for a significant proportion of the total expected world increase.²⁰

¹⁹ To date the actual U.S.S.R. pulp and paper capacity expansion has been somewhat slower than planned.

²⁰ It should be noted that whereas it is estimated that North America will account for only one fifth of total world expansion in paper and paperboard capacity, it is expected to account for about one half of expansion in pulp production capacity. Thus, the divergence noted earlier between the worldwide concentration of pulp capacity and the dispersion of paper and paperboard producing capacity is expected to widen further.

TABLE IV-18. - PRODUCTION OF NONWOOD FIBRE PULP, 1950-52 TO 1963

	Production				Average annual rate of change
	1950-52	1055- 57	1960-62	1963	1951-61	1956-61
	1000 metric tons				Percent
Europe	863	962	1 254	1 263	+ 3.8	+ 5.4
USSR	-	..	..	..	..	..
North America	657	580	431	515	4.0	5.7
Latin America	48	147	330	373	+ 21.3	+ 17.6
Africa	12	19	61	76	+ 17.5	+ 26.8
Asia-Pacific	335	759	2 027	2 169	+ 19.7	+ 21.7
WORLD TOTAL	1 915	2 466	4 102	4 396	+ 7.9	+ 10.7

TABLE IV-19. - RECORDED WORLD PRODUCTION OF PAPER AND PAPERBOARD BY CATEGORIES, 1956-61

	World production		Percentage increase 1961 over 1956	Percentage of total world production of paper and paperboard
	1956	1961		1956	1961
	1000 metric tons
Newsprint	11 837	14 328	21	20	18
Printing and writing paper other than
newsprint	10 899	14 240	31	18	18
Other paper and paperboard	36 694	48 731	33	62	64
Total	59 430	77 299	30	100	100

TABLE IV-20. - RECORDED PRODUCTION OF PAPER AND PAPERBOARD, BY CATEGORIES AND REGIONS, 1950-52 TO 1963¹

	Recorded production				Average annual rate of growth
	1950-52	1955-57	1960-62	1963	1951-61	1956-61
TOTAL PAPER AND PAPERBOARD	1000 metric tons				Percent
Europe	12190	17262	23569	25953	6.8	6.5
U.S.S.R.	1669	2591	3447	3854	7.6	5.9
North America	27757	33744	38885	41683	3.4	2.8
Latin America	807	1149	1766	1995	8.1	9.0
Africa	65	228	364	444	18.8	9.8
Asia-Pacific	1949	4456	9268	10908	16.8	15.7
WORLD TOTAL	44437	59430	77299	84837	5.7	5.4
NEWSPRINT
Europe	2525	3360	4312	4432	5.5	5.1
U.S.S.R.	267	366	489	563	6.3	6.0
North America	5958	7214	7930	7907	2.9	1.9
Latin America	53	70	160	198	11.6	17.8
Africa	-	-	18	38	-	-
Asia-Pacific	294	827	1419	1708	17.0	11.4
WORLD TOTAL	9097	11837	14328	14846	4.6	3.9
PRINTING AND WRITING PAPER (other than newsprint)
Europe	2643	3766	5184	5858	7.0	6.7
U.S.S.R.	338	581	726	805	8.0	4.6
North America	4461	5386	6445	7217	3.7	3.7
Latin America	177	244	301	320	5.5	4.4
Africa	28	49	74	90	10.2	8.6
Asia-Pacific	418	873	1510	1787	13.7	11.6
WORLD TOTAL	8065	10899	14240	16077	5.8	5.5
OTHER PAPER AND PAPERBOARD
Europe	7022	10136	14073	15663	7.2	6.8
U.S.S.R.	1064	1644	2232	2486	7.7	6.3
North America	17338	21144	24510	26559	3.5	3.0
Latin America	577	835	1305	1477	8.5	9.3
Africa	37	179	272	316	22.1	8.7
Asia-Pacific	1237	2756	6339	7413	17.7	18.2
WORLD TOTAL	27275	36694	48731	53915	6.0	5.9

¹ See also Annex Table IV-D.

TABLE IV-21. - ESTIMATED PAPER AND PAPERBOARD PRODUCTION CAPACITY BY SELECTED COUNTRIES AND REGIONS, 1960 AND 1968

	Estimated capacity		Percentage growth	Estimated capacity as percentage of world total¹
	1960	1968	1960-68	1060	1968
	1 000 metric tons
United States	35 046	43 198	23	42	35
Canada	9 014	11 479	27	11	9
U.S.S.R.	3 227	10 400	222	4	8
Japan	5 900	10 070	71	7	8
Germany, Fed. Rep. of	3 465	5 220	51	4	4
United Kingdom	4 000	5 130	28	5	4
Finland	2 114	4 255	101	2	3
France	2 776	4 157	50	3	3
Sweden	2 245	4 050	80	3	3
Italy	1 600	2 931	83	2	2
Latin America	1 945	3 898	100	2	3
Africa	302	813	169	² -	1
Near East	108	262	142	² -	² -
Far East (excl. Japan)	872	1 789	104	1	2
China (Mainland)	2 860	3 950	38	3	3
Oceania	697	1 311	88	1	1
Other countries	6 916	10 829	56	10	9
WORLD TOTAL	83 087	123 742	49	100	100

SOURCES: FAO, World Pulp and paper capacities, 1960-68, FAO surrey 1965, and country data.

¹ Totals do not add to 100 due to rounding. - ² Less than one half of 1 percent.

Capacity in the many other smaller paper and paperboard producing units throughout the world is expected to grow from about 17 percent of world capacity in 1960 to 21 percent in 1968. Latin America is expected to approximately double paper and paperboard production capacity between 1960 and 1968, and Africa, starting at a very low base output in 1960, is expected to almost triple capacity by 1968, to reach 813,000 metric tons in that year.

Fibre raw material requirements

The fibre raw materials for paper making can be divided into three main categories: wood fibres, nonwood fibres, and waste paper. In 1963 approximately 77 percent of the fibrous raw material used in the manufacture of paper and paperboard in the world was wood-pulp, about 5 percent was pulp made from nonwood fibres, and about 18 percent was waste paper.

The proportions of the raw materials used differ widely according to the type of paper or paperboard being made. There is, furthermore, considerable scope for substitution of one type of fibre for another. As is shown in Table IV-22, the relative importance of wood and nonwood fibre also varies considerably among different regions, owing partly to these substitutions and partly to differing product mixes in different countries.

The pattern of raw material supplies available for, and utilized by, the pulp and paper industry has been changing. Three of the most important developments have been the rapidly expanding use of wood residues, the significant rise in the use of broadleaved woods, and the rapid growth of pulp and paper production based on fast-growing plantation species. All have been dictated by the need to keep wood raw material costs in check. Although this cost item looms less large in the total costs of production than it does in the other primary wood-using industries, it is still generally the largest single item in the cost of manufacturing pulp.

UTILIZATION OF WOOD RESIDUES

Rapid expansion of the pulp and paper industry has put increasing pressures on the traditional sources of coniferous pulpwood in many parts of the world. One result of these pressures has been a rapidly expanding use of wood residues in pulp production. In the United States, for example, consumption of industrial residues in pulp production rose from an insignificant 660,000 cubic meters in 1940 to more than 19 million cubic meters in 1962, or from 2.2 percent of the total wood consumption in pulp production to more than 20 percent of the total in 1962. It is expected that by 1970 the volume of residues used will have increased to 31.9 million cubic meters and will account for about 25 percent of total pulpwood consumption. (Although it is estimated that the amount will further increase to 37.4 million in 1980, the percentage share of total pulpwood consumed will have decreased to 21.6 percent.) Similarly, in Japan, the amount of residues in total pulpwood consumption rose rapidly from 11 percent in 1956 to over 28 percent in 1961. Table IV-23 shows the rapid rise in residue utilization for some other major pulp producing areas.

TABLE IV-22. - REGIONAL PULP PRODUCTION, BY TYPE OF FIBROUS RAW MATERIAL, 1960-62 AVERAGE

	Production		Percentage of total pulp
			Wood pulp		Nonwood pulp
	Total pulp	Wood pulp	Coniferous	Broadleaved
	1000 metric tons
Europe	19150	17895	84	10	6
U.S.S.R	-	3457	99	1	1-
North America	35307	34776	83	16	1
Latin America	1035	705	257	211	232
Africa	217	156	16	57	27
Asia-Pacific4	1195	689	58		42
Japan	3954	3948	350	350	1-
China (Mainland)	2200	683	(20)	(11)	69

¹ Some use, but less than 1 percent. - ² Based on 1962-63 figures. - ³ Based on 1962 figures. - ⁴ Less Japan and China (Mainland).

By 1963 there were, however, signs that the growth in residue use was slowing down in many countries. The share of residues in Europe's wood for pulping appears to be dropping slightly, apparently due to the fact that the principal residue-using countries, Finland and Sweden, have already exploited the economically available and usable solid residue supplies. Since the sawmilling industry - the principal producer of wood residues - is growing much more slowly than the residue-using industries, it is inevitable that growth in the supply of residues will be slower than growth in requirements for wood raw material for pulp and boards. However, in the period up to 1975 there will remain very large additional quantities of residues in the form of sawdust and shavings, as well as previously uneconomic solid residues from smaller mills which could be brought into use.

GROWING USE OF HARDWOODS

One of the most important recent trends in the pulp and paper industry is the increased use of broadleaved species, to a great extent brought about by the development of improved pulping processes. In the past the industry depended on conifers because of their long fibres which produced strength in paper and because of the ease with which they could be pulped with the traditional technology. Location of pulping capacity was limited mainly to areas that had access to coniferous wood supplies. Modern kraft and semichemical processes have permitted a widening of the raw material base to include many broadleaved species which, through these new processes, give pulp with desirable strength and other characteristics. The added locational flexibility achieved through the growing use of broadleaved trees is clearly of the greatest importance for future developments.

The extent to which hardwoods are being and are expected to be utilized in pulp production in the major producing countries is shown in Table IV-24. As the table shows, it is foreseen that the present rapid growth rates in hardwood utilization will continue. Indeed, it can be said that there are by now few technological limitations to the use of hardwoods; the restrictions are more of an economic nature. For example, logging and handling costs tend to be higher per unit of raw material for broadleaved species than for coniferous species. At present delivered costs of hardwood pulpwood still tend to be lower due to lower prices of the standing timber, but it is probable that as demand for hardwoods rises the price differential will narrow.

The pressures to maximize the use of broadleaved species for pulp are evidently likely to be greatest in the areas which are better endowed with this resource than with coniferous species. The figures for the United States and continental western Europe tend to bear this out.²¹

²¹ As indicated in Table IV-24, use of hardwoods in the conifer-rich northern European countries is much less relative to total pulpwood consumption than is the case in the other western European countries. Similarly for the United States (although not shown in the table) hardwoods are much more heavily utilized in the eastern United States where conifers are relatively scarce and hardwoods relatively abundant. Indeed, the developments in the use of hardwoods have permitted a renewed expansion of the pulp industry based on small-sized hardwoods in the eastern United States.

To date the hardwoods from the enormous areas of tropical rain forest have hardly been used for pulping. The obstacles again are less those of a technological nature many species have been successfully pulped under laboratory conditions - than of an economic nature. The necessary process of presorting a crop as heterogeneous in its properties as the tropical rain forest tends to be costly. There are, however, a few examples of successful commercial operations utilizing tropical species.²²

²² There are mills in Brazil and Colombia pulping mixed tropical hardwoods, and a number of mills, for example in India and Pakistan, utilizing single species.

TABLE IV-23. - UTILIZATION OF WOOD RESIDUES FOR PULP PRODUCTION IN SELECTED REGIONS AND COUNTRIES, 1957 TO 1963, AND ESTIMATES FOR 1965 AND 1966

	1957	1960	1962	1963	19651	19661
EUROPE (less U.S.S.R.)	1000 m³
Wood requirements	62 494	67 041	75 829	76 463	90 241	95 939
Residues utilized	5 323	8 382	9 629	9 933	11 839	12 347
Percentage of requirements	8.5	12.5	12.7	13.0	13.1	12.9
FINLAND
Wood requirements	12 245	14 300	17 400	18 730	21 960	23 000
Residues utilized	822	2 400	2 510	2 150	2 800	2 800
Percentage of requirements	6.7	16.7	14.4	11.5	12.7	12.2
SWEDEN
Wood requirements	21 300	22 600	25 500	23, 845	28 100	30 600
Residues utilized	1 350	1 800	2 100	2 400	3 350	3 350
Percentage of requirements	6.3	8.0	8.2	10.0	11.9	10.9
U.S.S.R.
Wood requirements	12 000	14 600	15 395	16 800	20 220	22 100
Residues utilized	320	1 800	2 207	1 830	2 600	2 700
Percentage of requirements	2.7	12.3	14.3	10.9	12.9	12.2
CANADA
Wood requirements	34 656	37 980	41 280	42 815	51 100	52 000
Residues utilized	2 182	4 050	6 200	6 923	8 400	8 700
Percentage of requirements	6.3	10.7	15.0	16.2	16.4	16.7

SOURCE: United Nations Economic and Social Council, Economic Commission for Europe, Timber Committee: Reports of the annual sessions of the Timber Committee.

¹ Estimates.

GROWING USE OF PLANTATION-GROWN PULPWOOD

Considerable success has been achieved in providing pulpable wood raw material from plantations of quick-growing tree species. Chapter III has dealt at some length with the advantages of this wood source - notably, a homogeneous raw material, short rotations and high yields per unit area, and therefore low delivered costs.

Significant developments in wood pulp production based on plantation sources of wood raw material are taking place inter alia in New Zealand, Australia, South Africa, Chile and Brazil. Table IV-25 indicates the rapid growth expected in the pulp industries in these countries of the Southern Hemisphere. The major plantation species being used at present are Pinus radiata and species of eucalyptus.²³ In addition, good results are achieved in Italy, for example, where plantation-grown poplar is utilized.

²³ Much of the southern pine used by the very large pulp and paper industry in the southern part of the United States e United States is also of plantation origin. ion origin.

USE OF NONWOOD FIBRES

In the tropical countries the most important pulpable indigenous raw materials have so far been various nonwood fibres, of which bagasse and bamboo are the most extensively used. Others are esparto grass, papyrus, reeds, straw and sisal. Use of these fibres usually depends upon solving the problem of making available at a reasonable cost sufficiently large quantities of these bulky materials. In the case of bagasse, a by-product of the production of sugar from cane which is normally used as fuel in the sugar mills, economic availability is tied to the size of the sugar-producing plant and the cost of alternative feels.

As noted earlier, nonwood fibres are of importance only in Asia, Latin America and parts of Africa, where their importance has in fact been growing. As is shown in Table IV-26, use of these fibres in western Europe and the United States is small and becoming relatively less important. In general, it can be said that if an adequate source of wood raw material is available, then nonwood fibres cannot compete economically with wood.

USE OF WASTE PAPER

As is also indicated in Table IV-26, the use of waste paper is quite substantial in the major producing areas of Europe and the United States, although the trend is toward a slight decrease in the relative importance of this source of fibre in paper production. The reasons for this expected decline in importance are (a) the rising costs of recovery and cleaning, (b) a growing proportion of nonrecoverable paper, and (c) the need to replace waste paper with higher quality wood pulp fibre as the pressures to improve the quality of paper products intensify. Nevertheless, it will remain a principal fibre raw material, particularly in some packaging grades of paper and paperboard, and consequently in countries such as the United Kingdom and the Federal Republic of Germany where a very large part of the output of the paper industry is of such grades.

TABLE IV-24. TRENDS IN THE USE OF BROADLEAVED IN PULP PRODUCTION IN SELECTED COUNTRIES SPECIES AND AREAS

	Pulpwood production		Broadleaved leaved pulpwood as percent-age of total
	Total	Broad-leaved
U.S.S.R.	Million m³
1963	16.52	0.28	2
1965*	20.73	0.96	5
1970*	56.26	8.56	15
United States¹
1950	45.5	6.38	14
1960	88.0	17.82	20
1962	94.2	19.58	21
1970*	124.3	29.70	24
1980*	169.4	46.20	27
Western Europe²
1950	27.5	1.2	4
1959	47.5	4.5	9
1960	52.3	5.3	10
1975*	90.0	20.6	23
Scandinavian countries
1950	22.7	0.6	2.6
1959	36.4	1.6	4.4
1960	40.1	2.0	5.0
1975*³	57.6	8.6	14.9
Other western European countries
1950	4.8	0.6	12.5
1959	11.1	2.9	26.1
1960	12.2	3.3	27.0
1975*	32.4	12.0	37.0
Japan4
1956	8.6	1.3	15.1
1960	12.3	3.7	30.1
1961	14.2	4.6	32.4

SOURCES: U.S.S.R.: Exhibition of Soviet Economic Achievement, 1964. United States: Timber trends in the United States, U.S. Dept. of Agriculture, 1965.

Western Europe: Pulp and paper prospects in western Europe, FAO, p. 218-220.

Japan: Forestry in Japan, Forestry Agency, Japan 1965.

* Estimates.

¹ Based on conversion factor of 2.2 m³/cord. ² Roundwood removals. - ³ The estimate for the Scandinavian countries has proven overly conservative since Finland, for example, is already utilizing the quantity estimated for 1975. ⁴ Pulpwood consumption.

TABLE IV-25. - ESTIMATED PULP PRODUCTION CAPACITY AND GROWTH OF CAPACITY IN SELECTED COUNTRIES BASING PRODUCTION ON PLANTATION WOOD

	Estimated capacity (1 000 m. tons/year)		Percentage growth in capacity
	1960	1968	1960 to 1968
South Africa	185	593	220
Chile	174	470	170
Brazil	500	1 066	113
Australia	236	448	90
New Zealand	260	541	108

SOURCE: FAO, World pulp and paper capacities 1960-68, FAO survey 1965, and country data.

TABLE IV-26. - TRENDS IN UTILIZATION OF WASTE PAPER AND NONWOOD FIBRE PULPS IN PAPER AND PAPERBOARD PRODUCTION IN WESTERN EUROPE AND THE UNITED STATES

	Total fibre used in pulp and paper	Waste paper	Waste paper as percentage of total fibre	Non-wood fibre pulp	Non-wood fibre pulp as percentage of total fibre
WESTERN EUROPE	Million m. tons			1 000 m. tons
1960	19.70	4.82	24	1.56	8
1963	22.97	5.58	24	1.48	6
1965	25.35	6.17	24	1.40	5
1970	32.57	7.66	23	1.18	4
1975	39.95	9.04	23	1.13	3
UNITED STATES
1919	6.6	1.9	29	0.7	11
1929	11.6	3.8	33	1.4	12
1940	15.5	4.7	30	1.0	6
1950	25.9	8.0	31	1.4	5
1960	35.7	9.0	25	1.0	3
1961	36.6	9.0	24	0.9	2
1962	38.6	9.1	23	1.0	2
1970	48.9	10.9	22	1.0	2
1980	65.0	12.7	19	1.3	2
1990	84.9	15.1	18	1.7	2

SOURCES: Europe: FAO Advisory Committee on Pulp and Paper, May 1965, Doe. II-11, p. 9.

United States: Timber trends in the United States. U.S. Dept. of Agriculture, Forest Resource Report No. 17, 1965.

SHIFTS IN THE OVERALL PATTERN OF THE FIBRE FURNISH

As the share of waste paper and other nonwood fibres used in paper production is expected to decline in most of the principal producing countries in the future, the share of wood raw material in the total fibre requirement is likely to grow, except in the developing areas of Asia, Latin America and parts of Africa. As these latter areas account for only a small percentage of total production, it can be expected that for the world as a whole there will be an increase in the share of wood per unit of pulp and paper output. The growing share in the pulp total of chemical pulps,²⁴ with low yields per unit of wood material, also tends to raise the average wood requirements. (Table IV-27 indicates the great differences in average yields for different pulping processes used in Europe.) Counteracting this trend is the rapid increase in the production of the high-yielding semichemical pulps. Also, pulp yields are increasing in most processes due to technological advances.

²⁴ This is largely due to the slower growth in the output of newsprint which is the outlet for most of the high-yielding mechanical pulp.

In the past these various trends in the pattern of raw materials used, in the composition of the mix of pulps produced, and in pulping yields have tended to balance each other out in terms of average wood requirements per unit of total pulp: in both Europe and the United States the average volume of wood used per ton of pulp produced has remained unchanged for many years. In the United States, the average requirement for all pulps has remained around 3.5 cubic meters per ton of pulp since the 1920s. In Finland, the average wood requirements per ton of sulfite pulp remained around 4.8 cubic meters per ton of pulp between 1940-44 and 1959, while the requirements for sulfate pulp actually dropped somewhat during this same period. On balance, therefore, it is not possible to say more than that, with these partly counterbalancing trends, the overall change in average wood requirements per unit of wood pulp is unlikely to be large: probably about as much wood will be required to produce a ton of pulp in 1975 as was the case in 1960.

SHIFTS IN THE STRUCTURE OF THE PULP AND PAPER INDUSTRY

Despite the technological advances giving it a broader and more flexible raw material base, there is a clear trend, on the global scale, toward a greater degree of geographical specialization of the industry with respect to type of product and raw material.

Production of the grades of pulp, paper and paperboard which have a high content of long wood fibre, and/or which serve mass markets, is tending to become increasingly concentrated in the countries with large resources of coniferous wood and already well-developed pulp and paper industries - i.e., northern Europe and North America, and to a lesser extent Japan and the U.S.S.R. Production of paper grades such as packaging papers, which are made with a large mixture of waste paper, rags, etc., tends to take place close to the source of the waste paper supply in the principal consuming countries. Mills producing many specialized grades of paper also tend to be located in the consuming countries as they are predominantly market rather than raw material oriented. Underlying this tendency for the industry to polarize is the increasing competition between the principal producers for markets and raw materials and the resulting pressures for improved - productivity in each section of the industry.

TABLE IV-27. - APPROXIMATE AVERAGE PULP YIELDS IN EUROPE

	Percentage yield¹
Dissolving	30- 40
Chemical	40- 55
Chemical high-yield	56 - 65
Semichemical	65 - 85
Chemi-mechanical	85 - 90
Mechanical (groundwood)	90- 95

SOURCE: UN/FAO, European timber trends and prospects, 1964.

¹ Ratio of the output of bone-dry pulp to the weight of bone-dry wood measured without bark at the mill.

Industry economics and economies of scale

The pulp and paper industry is highly capital-intensive and often exhibits marked economies of scale. These vary so much from process to process and from situation to situation that generalized figures cannot have much meaning. However, the data in Table IV-28 give some idea of what is involved.

Labor and overhead costs per unit of output tend to reduce substantially with increasing scale of operation, but delivered wood costs tend to increase because of the increased average hauling distance needed to provide larger quantities of wood raw material. It has largely been the need to hold rising raw material costs in check which has encouraged the development of the more flexible and higher-yielding pulping processes: in areas where the forest resource comprises more than one species, such flexibility allows more concentrated and therefore lower cost procurement of raw material. Attention has also been directed to ways and means of improving the efficiency of logging and transportation of the log raw material. Some of the aspects of this phase of production common to all the primary wood-using industries are considered later in the chapter. In the pulp and paper industry, particular attention has been given to evening out the supply of raw material: because of its very large requirements a pulp mill has to hold a huge, expensive wood inventory when logging and wood delivery are seasonal (also storage often tends to cause a deterioration in the pulping characteristics of the wood.) There has therefore been a move in the direction of year-round logging. Rising costs of wood have also focused attention on the potential for producing low cost wood for pulping from fast-growing high-yield plantations in various parts of the world. It has been estimated, for example, that wood costs would only represent about 46 percent of total direct manufacturing costs for unbleached sulfate pulp produced in a 300-ton daily capacity mill in western South America (based mainly on plantation wood sources), while for a comparable 300-ton mill in Scandinavia wood costs represent about 77 percent of direct manufacturing costs.

But economies of scale are achievable only where the size of the market permits. Large size is therefore to be found principally in the mills manufacturing mass grades such as newsprint, magazine paper, kraft liner and kraft sack paper. International as well as domestic competition has pressed increasingly on these parts of the industry, leading to ever larger mill sizes and to integration of the pulping and paper-making stages. In addition to savings in administrative costs, physical integration of pulp and paper- production - where the bulk of the fibre furnish is of a simple main pulp grade -brings important reductions in production costs because drying, packing, storage, transport, and reslushing of the pulp are eliminated. Large size also imposes problems of raw material procurement and of product marketing, which have tended to induce further vertical integration backward into the wood producing stage and forward into paper conversion and product marketing and distribution.

The growth in average size of new mills constructed in the United States is apparent from Table IV-29. The same types of large mills are being constructed in Canada. Given the very large capital costs associated with these big mills, it is clearly becoming increasingly difficult for other than established producers to enter the mass grade pulp and paper industry, unless under more favorable cost and market conditions. With low costs, or markets remote from the producers supplying the world market, production can still be competitive on a smaller scale.

Also, there is much less to be gained from large size in the production of specialized grades of paper, or paper and paperboard made from a mix of different fibre raw materials. Insofar as competition from other domestic producers has led to concentration in these market-oriented sectors of the industry, the resulting integration has tended to be forward toward the market rather than backward into the supply of raw materials.

TABLE TV-28. - ECONOMIES OF SCALE FOR DIFFERENT TYPES OF PULP AND PAPER MILLS

	Daily capacity (metric tons)
	25	50	100	200
	Fixed investment in $ 1000 per daily ton
NONINTEGRATED
Unbleached chemical pulp	235	175	135	105
Bleached chemical pulp	325	240	190	150
INTEGRATED
Unbleached paper	300	230	180	140
Bleached paper	390	295	235	185

SOURCE: Jack C. Westoby: The role of forest industries in the attack on economic underdevelopment. FAO, Unasylva, 16: 67, 1962.

TABLE IV-29. - AVERAGE CAPACITY OF WOOD PULP MILLS IN THE UNITED STATES BY TYPE OF MILL, SELECTED YEARS 1920-61

	Average for all types	Sulfite	Sulfate	Groundwood¹	Soda	Semichemical²
	Metric tons per 24 hours
1920	47	57	33	42	57
1930	69	80	94	60	62	23
1940	115	108	261	74	70	68
1950	169	136	361	95	89	133
1956	202	165	468	119	120	101
1959	226	174	527	123	132	129
1961	254	185	584	141	146	139

SOURCE: Woodpulp mills in the United States, U.S. Dept. of Agriculture, Forest Service, 1961.

¹ Includes chemi-groundwood. - ² Includes mill producing defibrated and exploded types of pulp used largely in the manufacture of insulating board, hardboard and roofing felt. Mills manufacturing particle board are not included.

Conclusion

The pulp and paper industry stands out as the most technically complex and capital-intensive of the forest industries. The larger part of the industry's production comes from large, highly organized and integrated production units. Capital and skill requirements are considerable and as a result only a limited number of countries have been able to adequately support large-scale operations which could effectively compete in the world markets for mass grades of product. The world market for mass grade pulp products, in contrast with those for other forestry products, is characterized by a high degree of international integration. However, much of the range of papers and paperboards are still produced predominantly for domestic markets, many of them in mills of only moderate size.

Major problems which the industry faces, in common with most of the other forest industries, are the increasing cost of and competition for wood. It has adjusted to these pressures by improving the efficiency of wood procurement, by developing processes which permit effective pulping of a wider range of species, sizes and qualities - notably broadleaved species and wood residues from other forest industries - and by basing production on fast grown plantation woods. As a result there has been a significant increase in the flexibility of the industry in utilizing more efficiently the wood resource, either in established locations or in areas previously not economically accessible.

Although excellent opportunities for pulp and paper production do exist in other regions, by far the greatest expansion in total pulp and paper capacity in the period up to 1975 is expected to take place, as it has in the past, in the temperate regions of North America, the U.S.S.R., northern Europe and Japan.

Prospective developments in the primary wood-using industries

The future development of each primary wood-using industry depends, in common with all industries, on the growth in demand for products of the industry, and on the efficiency with which the industry will be able to combine capital goods, labor and available raw materials to produce and market these goods. The situation with respect to consumer demand for wood products was examined in Chapter II, the resource base has been considered in Chapter III, and the earlier parts of this chapter have reviewed the structure of the individual wood-processing industries and the manner in which their organization and technologies have developed. It remains to consider how the forest industries react to and are affected by their common problems of procuring adequate and economical supplies of wood, and how this, together with their respective processing situation and their search for product markets, will determine their future prospects.

In general the forest industries are faced with rising wood costs, resulting from increasing stumpage prices brought about by growing competition for wood and from increasing wages which cannot always be offset by substitution of capital equipment or greater efficiency in wood operations. Because the cost of delivered wood represents a very significant part of total costs of most primary forest industries, this problem is of fundamental importance.

Considerable attention has been paid in this chapter to the developments that are taking place in the different industries in order to cope with this tendency for costs of wood raw material to rise. Briefly, they may be summarized as: (a) constant technical improvements in processing to produce a greater volume and value of product from a cubic meter of wood; (b) acceptance, as a consequence of technological improvements, of changing product demands and better knowledge of a wider range of species, qualities and sizes (including wood residues); and (c) development of improved cultivation, management and harvesting techniques in order to lower the delivered cost of wood.

But the application of these solutions to the raw material cost problem is very much affected by the interrelationships that exist among the primary woodusing industries because they have, in wood, a common raw material:

1. To a considerable extent their requirements are complementary: logs of the largest sizes and highest quality are usually best utilized by the veneer and plywood industry, logs not so large but of good quality are satisfactory for the sawmilling industry, while the pulp and board industries, although capable of using wood of a wide range of quality and size, use roundwood often too small in size or too low in quality to be sawn. Development of forest industry complexes can, consequently, lead to more complete and often more effective use of the forest resource than would be the case with a single industry.

2. The ability of the pulp and fibre and particle board industries to utilize residues from sawmilling and veneer operations, and those of secondary woodusing industries such as furniture manufacturing, further strengthens the complementarily of the subsectors.

3. Nevertheless, all wood-using industries compete to a degree for the more readily available wood supplies. Some competition may be over nearly the full range of size and quality, as between the pulp industry and the board industries, while competition between these industries and the sawmilling industry, or between the latter and the veneer and plywood industry, occurs only over the parts of the range of roundwood sizes and qualities where requirements overlap.

These interrelationships have affected, and will continue to affect, the development of the various forest industries, not only directly in respect to their wood procurement arrangements, but also indirectly in relation to processing and marketing functions.

The pressures to utilize fully the products of the forest in their complementary outlets have tended to be weakened partly by the fact that much of the forest land is publicly owned or held as small private holdings, and partly by the fact that production of wood for industry, i. e., maintaining the forest lands and the forest growing stock, all too often has been divorced from the succeeding stages of harvesting and processing. But there is a growing tendency, noted earlier, for many pulp manufacturing enterprises, and for larger sawmilling operations, to become integrated with the wood-producing stage in order to secure their raw material supplies. This has heightened their interest in associating or integrating with other forms of primary wood conversion in order to make fuller use of the forest potential and to spread the cost of holding and protecting forest land.

Horizontal integration is also encouraged by developments at the harvesting stage. Logging and transportation generally account for by far the greater part of the cost of wood delivered at the processing plant. Considerable attention is consequently being devoted to reducing costs at this stage. Attention has already been drawn to some of the developments specific to particular industries, such as the trend to year-round logging of pulpwood to ensure an even flow of supplies. There is also a marked tendency to raise the cut per unit of area to the maximum in order to spread the costs of logging and transport. Harvesting only for sawlogs, or only for pulpwood, in stands which will produce a share of each is often growing too costly.

Secondly, because labor accounts for such a large part of harvesting cost, there are strong pressures to reduce use of labor to a minimum by extracting the whole tree, or the tree trimmed only of what will not be used at all, to be further cut up, prepared and sorted at central points where maximum use can be made of machinery. But the full benefits of such systems are to be obtained only if all the resulting sizes and assortments are going to processing plants at a single location. The more they have to be resorted and transferred, the more the costs of these operations offset the savings of labor in the forest²⁵ (such use of machinery also tends to require substantial volumes of throughput to be economic, and so to be more appropriate to large operations).

²⁵ At the same time, the development of truck hauling has improved the competitive position of the more flexible system of cutting to size and sorting in the forest. Wood can then often be hauled, if not from the stump, from the roadside, to the plant without further handling or sorting. The development of simple truck-mounted loading grapples further improves the cost-saving possibilities with this system.

Passing to the processing stage, pressures for horizontal integration or association between the different primary wood processors stem mainly from the fact that the pulp and fibre and particle board industries use as raw material the solid wood residues from sawmilling, the manufacture of plywood and veneer, and the secondary wood-using industries such as the manufacture of furniture. Earlier sections of the chapter have given some idea of the importance of this utilization to both the using and the producing industries. The highly successful fibreboard and particle board industries have, to a large extent, been built up on the use of cheap wood residues, which now have also become an important part of the raw material base of many pulp and paper mills.

TABLE IV-30. - SHARE OF RESIDUES IN TOTAL CONSUMPTION OF INDUSTRIAL WOOD IN EUROPE AND THE UNITED STATES 1961 AND 1975

	Consumption of industrial wood¹	Residues
		Total amount economically usable	Share of total industrial wood consumption
United States	Million m³ ®		Percent
1961	1 288	18	6.3
1975	1 376	35	9.3
Europe
1961.	² 259	14	5.4
1975	² 376	25	6.6

¹ Roundwood equivalents of wood products consumed. - ² Wood raw material equivalents of wood products consumed.

TABLE IV-31. - PATTERN OF USE OF WOOD RESIDUES IN EUROPE AND THE UNITED STATES, BY TYPE OF RESIDUES AND USE, EARLY 1960s

	Total residues available		Used by pulp industry		Other industrial uses³ and fuel		Unutilized
	Coarse¹	Fine²	Coarse	Fine	Coarse	Fine	Coarse	Fine
EUROPE (1959 - 61)	Million m³
All species	26	26	8.5	-	2.5	1	15	25
UNITED STATES (1962)
Softwoods	60.4	18.4	15.3	11.0	15.7
Hardwoods	17.2	1.6	6.2	4.0	5.3
All species	77.6	20.0	21.5	15.0	21.0

SOURCES: European timber trends and prospects - a new appraisal, 1950-1975; Timber trends in the United States.

¹ Europe: defined as solid residues; United States: unused material suitable for chipping, such as slabs, edgings, and veneer cores. - ² Europe: includes sawdust and debarking residues; United States: unused sawdust, shavings, etc., not suitable for chipping. - ³ Includes use in particle board, fibreboard and miscellaneous other industrial uses.

Considerably larger quantities of residue raw material are expected to be used industrially by 1975 - probably as much as 100 million cubic meters of coarse residues a year in the world as a whole. But, as is shown in Table IV-30, the proportion of the total raw material which is economically available in residue form in Europe; and the United States is not expected to grow much. In most of the principal producing areas in these regions much of the residues which could be usable, given present economic and technological limitations, have already been drawn upon, and the volume of residues produced is not growing as fast as the demands for wood raw material.

However, there are large quantities of residues, such as sawdust and bark, which have not yet been used industrially on a large scale. Table IV-31 indicates the relative and absolute importance of these types of wood residue in Europe and the United States. It is expected that increasing efforts will henceforth be devoted to overcoming the technological and economic limitations in the way of a fuller use of these grades of residues in, for example, pulp and fibreboard production. If this comes about, it will of course strengthen further the links between the residue-producing and residue-using industries.

As has been noted earlier in the chapter, the development of outlets for its processing residues has transformed the situation of the sawmilling industry, enhancing the economic position of mills large enough to be able to install residue-preparing machinery and further undermining the position of those that are not large enough. This widening of its revenue base is all the more important to the sawmilling industry in view of the generally less favorable situation in which it finds itself in the interindustry competition for wood raw material. The pulp industry (and to a lesser degree the fibre and particle board industries) are competing with it for an ever wider range of log sizes at the lower end of the sawlog scale, and the plywood industry is doing the same at the upper end (and the technological developments in the direction of peeling smaller diameter logs have extended the range of competition for the species concerned). Wood raw material costs as a rule constitute a smaller part of total costs in these industries than in the sawmilling industry, and as they have generally proved to be better able to achieve cost economies elsewhere in the production process, they are often in a better position to absorb higher log prices than the sawmilling industry. It has been said that few large sawmills in Scandinavia would be economically viable if they did not have outlets for their residues through their linkages with the pulp and paper and fibreboard industries.

Competition has not of course been confined to this area. Attention has already been drawn to the effects of the competition for residues and for small-sized roundwood between the pulp and board industries: in the main its impact is to narrow the base of the latter to the poorer wood grades and to localities where the supplies (or markets) are too small to allow a pulp or pulp and paper mill to operate.

To sum up so far, it can be said that the interrelationships between the different primary wood-using industries nearly all tend to create pressures for some measure of linkage or working association as the competition for wood raw material, and for markets, intensifies. Attention has already been drawn earlier in the chapter to the fact that cost-reducing developments also tend to lead to vertical integration between the different stages in the production of any particular wood product. Most forest industries have in general been seeking to improve productivity by increasing plant size in order to benefit from economies of large scale in their capital, labor, administration, overhead and other costs. This tendency is most pronounced in certain branches of the heavily capital-intensive pulp and paper industry (where physical integration of the two stages also brings economies of its own) and least pronounced in the sawmilling industry. But in all the wood-using industries large size tends, as noted earlier, to create supply and market problems, which lead to integration with the wood producing and product converting and the marketing stages.

The earlier conclusion that the pressures on the woodusing industries were in the direction of a greater degree of interindustry horizontal integration can thus be extended to say that the linkages are occurring both horizontally and vertically. In Scandinavia, for instance, where a physical limit to the quantities of wood available is in sight, this combination of pressures is having a marked effect on the overall structure of the forest industries and their relationships with each other. Wood is increasingly being diverted from fuelwood and other roundwood outlets to industry, and within the industry aggregate the pulp and board industries are utilizing more and more log sizes which were previously sawn. The growth in sawmilling output is therefore being curtailed in favor of the other industries which give a higher return per unit of raw material. Furthermore, within the pulp and paper industry emphasis is shifting from the production of market pulp to that of paper and paperboard - thus further adding to the value added domestically to the wood raw material available to the forest industries in northern Europe.

In the U.S.S.R. and some of the countries of eastern Europe, much of the new forest industry capacity is being planned from the start in the form of large, fully integrated complexes. At Bratsk in the U.S.S.R., for example, an industrial complex is approaching completion which will process 4 million cubic meters of roundwood annually to give 200,000 tons of dissolving pulp, 280,000 tons of kraft liner, 54,000 tons of fodder yeast, 860,000 cubic meters of sawnwood, 65,000 cubic meters of particle board, as well as furniture to the value of 30 million rubles.

But it must be recognized that the pressures that lead to such developments are by no means universally felt. The level and pattern of production in any given area will reflect the circumstances of market and costs, and these vary widely around the world. Their effect upon the different industries can perhaps be summarized as follows.

When the size of market is small but a supply of large size and good quality timber is available, the sawmilling industry, which can operate economically in small units, is apt to develop more rapidly than the other wood-using industries, at least with respect to supplying expanding local demands. In such cases, there will be little pressure for integration. Furthermore, the supply of cheap sawnwood products makes it difficult for the wood-based panels to become established on the market to the extent that would justify the creation of a panel industry. These conditions hold for some remaining locations in the more developed countries but are most common in those parts of the developing regions lying in, or close to, the tropical closed forests, or in the best locations in the dry forests. In most of the developing countries there is still much scope for increasing sawnwood use. It has been pointed out in Chapter II that one third of the expansion of world sawnwood consumption is expected to occur in the developing regions. Thus the prospects for the sawmilling industry to expand within these regions are good. But the industry will need to look to the product it produces. Poor performance to date has created an unfavorable market reaction in all too many parts of the world.

In the industrially more advanced countries, sawnwood is likely to be subjected to a continuation of the pressures that have been described in this chapter at both the wood supply and the market ends. The overall size of the sawnwood market may be expected to grow but little. But although this situation is certainly likely to press heavily upon the smaller size of mill, the more advanced sectors of the industry should continue to grow. In effect, the future is likely to see in these countries a further reorientation and restructuring within the industry in favor of the larger and more highly mechanized mill.

The veneer and plywood industry is either resource-based or dependent on a ready flow of good quality logs. It is frequently opportune for this industry to operate in association with sawmilling, to better utilize the range of large-sized roundwood both draw upon. Since, especially in the case of veneer production, operation may be successful economically in comparatively small-scale units, it is often the first wood-based panel industry to be developed. But only where the domestic market is large is it generally feasible to integrate the manufacture of plywood with production of particle or fibreboard, because the wood products manufactured are so similar in many respects. The growth of the veneer and plywood industry will continue to depend largely on a suitable supply of veneer logs - although it should be recognized that the range of acceptable sizes and species is expanding. At present a feature of the industry is that so much of its raw material is imported. But it is foreseen that with further growth this industry will increasingly be established closer to the resource base.

It is expected that growth of the particle board and fibreboard industries will be concentrated either in areas with markets capable of absorbing the output of board mills in addition to sawnwood and plywood, or in areas with insufficient supplies of sawlogs or veneer logs to meet local demands for wood products. In the former case, the industry will usually be integrated with other forest industries. In the latter case, the successful establishment of plants will often depend on efficiency of procuring the poorer wood materials, be they wood residues or lower grade timber. Thus, in the developed countries the best opportunities are for integration of board mills with concentrations of wood-working plants or for the establishment of separate plants drawing on supplies of roundwood of a size or quality unsuitable for sawnwood, veneer or pulp production. Opportunities to create board industries probably exist in many areas within the world's dry forests. Plantation thinnings may also provide for the establishment of board plants, even prior to production of sawlogs or to establishment of a pulp mill.

The growth of the pulp and paper industry is likely to occur mainly in those areas with access to adequate investment capital and - in addition to other resources, especially water - where supplies of pulpable raw material are available in sufficient quantities to support a mill of minimum economical size. Because this minimum is so large in many branches of this capital-intensive industry, most of the future development, in particular at the pulping stage, is likely to be, as at present, in the countries of the north temperate zone with, or adjacent to, large markets or abundant supplies of raw material. But the growth in markets elsewhere in the world is likely to bring with it increasing pressure and a steady growth in the industry outside the north temperate zones, in countries where favorable cost or market conditions may permit operation of units on a smaller scale.

It remains to review the probable development of the primary wood-using industries in the different regions. But this can be treated more appropriately in Chapter VI, where consideration is given to all the different elements of the future wood balance together. However, it is as well to note here that, despite a growth of trade in forest products relatively more rapid than the growth in consumption, and despite the substantial changes in international supply patterns for wood, the fact still remains true that the great bulk of industrial development is likely to parallel closely, at least on a regional basis, the growth in consumption.

ANNEX TABLE IV-A. - PRODUCTION OF SAWNWOOD, 1960-62. AND CHANGE IN PRODUCTION. 1956-61

¹ Estimated total production in 1960-62 differs from that recorded by an allowance for unrecorded production (for an explanation of the differences. see the Appendix). - ² Including sleepers. - ³ Excluding sleepers.

ANNEX TABLE IV-B - PRODUCTION OF WOOD-BASED PANELS,¹ 1960-62. AND CHANGE IN PRODUCTION, 1956-61

¹ Excluding veneer - ² Figures in brackets show recorded production in oases where the latter is significantly different from estimated total production (for an explanation of the differences see the Appendix). - ³ Subregional production started after 1955-57.

ANNEX TABLE IV-C. - PRODUCTION OF WOOD PULP, 1960-62, AND CHANGE IN PRODUCTION, 1956-61

¹ Subregional production started after 1955-57.

ANNEX TABLE IV-D. - PRODUCTION OF PAPER AND PAPERBOARD, 1960-62, AND CHANGE OF PRODUCTION, 1956-1961

¹ Figures in brackets show recorded production in oases where the latter is significantly different from estimated total production (for an explanation of the differences see the Appendix). - ² Subregional production started after 1955-57. - ³ Included in " Other paper and paperboard."