Process-based analysis of added value in forest product industries

Roger Sathre and Leif Gustavsson

Forest Policy and Economics, 2009, vol. 11, issue 1, 65-75

Abstract: Manufacturing products with greater added value is increasingly viewed as a strategic goal of forest products industries. Added value is defined here as the difference in economic value between the physical inputs and outputs of a production process, and is generally analysed at the firm or national economy level. In this study we identify and discuss issues involved in quantifying added value at the industrial process level, and develop a bottom-up method to estimate the value added by forest industry processes. We calculate the value added by 14 traditional and emerging processes within the Swedish forest products industries, and express the results using various indices. We find that the type of biomass input strongly influences the potential for adding value, with sawlogs allowing more added value and being less sensitive to input price fluctuations than pulpwood and forest residues. Structural wood products such as lumber and glue-laminated beams are found to give the greatest value added. Co-production of multiple products from a single raw material increases total value added. Integrating the value chain of pulp and paper production significantly increases the value added to pulpwood. Multiple conversion processes exist for using forest residues as fuel, with a range of potential added value. Consideration of the climate benefits of forest product use, through the application of a carbon tax, significantly increases the added value.

Keywords: Value; added; Forest; products; Bottom-up; analysis (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (10)

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