Forest to Frame showcases the public and private partnerships contributing to a growing movement that's redefining how apartments, hotels and offices are constructed. The 20-page report profiles Oregon developers, architects and contractors who are at the forefront of using advanced wood products such as cross-laminated timber (CLT) to build multistory structures – even skyscrapers – almost entirely out of wood. It also highlights prominent projects in the state that are changing perceptions about wood construction, including a 12-story timber tower in Portland that will be one of the first CLT high-rises in the United States.
Other topics covered in the report include groundbreaking research in Oregon demonstrating the safety of mass timber buildings, the many environmental benefits of building with wood, and how its use for construction supports economic development in Oregon's rural timber towns.
"Forest to Frame offers a fascinating overview of mass timber construction and why it holds great promise on a number of fronts," says OFRI Director of Forest Products Timm Locke. "The report demonstrates that it's both possible and practical to meet our growing construction demands with the most remarkable building material we've ever known: wood."
Digital and print copies of Forest to Frame are available to download and order through OFRI's website, OregonForests.org.
The Oregon Forest Resources Institute was created by the Oregon Legislature to advance public understanding of forests, forest management and forest products and to encourage sound forestry through landowner education. OFRI is governed by a 13-member board of directors and is funded by a portion of the forest products harvest tax.
Mass timber manufacturer Structurlam Products is a Penticton, B.C.-based company that uses pre-fabrication in every project it undertakes. The company champions this process because they find it results in cost savings for clients, fast on-site assembly, safer work sites and an opportunity for higher quality structures.
Preparation is key in pre-fabrication
The important first step in pre-fabricating the pieces that will ultimately be put together to form a building is the creation of a 3D model. Mocking up the building exactly as it will need to be created — also known as virtual construction — from the walls, to the holes for plumbing and electricity, is a means of testing and fine-tuning the details to ensure everything is in place before anything is produced and sent to site. Structurlam advocates that all trades use a single geometry model during this process, as it reduces confusion and saves time for all involved. Once the modelling is underway, Structurlam can make adjustments to the building as needed to allow for tolerances and fabrication details.
Once the 3D model is complete, the customized data can then be used to create a list of materials that are needed, the exact shop drawings can be completed and then the pre-fabrication of the pieces can begin. The modelling work results in a process that creates the CNC machine codes for the geometry needed to produce each unique panel. This begins what will ultimately make completing the building akin to putting together a dresser from IKEA.
“At Structurlam we work closely with all trades involved to ensure everything that will go into the building is reflected perfectly in the 3D model,” said president of Structurlam Bill Downing. “Our ability to incorporate every detail into the pre-fabrication process allows us to deliver the pieces to a building that will come together smoothly and benefit all who are working together to erect it.”
Upon completion of the individual pieces, these fabricated panels are placed in order of delivery to the site. They are loaded on to the trucks perfectly to match the installation sequence. While this requires a tremendous amount of pre-planning, it is what results in the time and cost savings for the project and allows for buildings to be erected in high-traffic, small footprint areas, as there is no material stored on site.
Tall wood and pre-fabrication
Pre-fabrication is an essential element the construction of mass timber buildings. For example, this process was utilized at the recently completed Brock Commons at UBC, the world’s largest tall wood building. The 18-storey mass timber structure will be a student residence building, housing more than 400 students when it is completed in May 2017.
Structurlam provided 169 mm, 5 layer CLT panels measuring 2.9 x 11.8 m for floors, along with glulam columns for the building’s interior. Steel connectors allowed the building to be put together quickly and safely. The steel connectors allowed for a direct load transfer between columns and also provided a bearing surface for CLT panels. The seamless construction of this record-breaking project was well served by pre-fabricating the pieces.
Benefits of pre-fabrication
Pre-fabrication can be realized for any size or scope of project, from record-breaking towers to multi-family homes in dense urban areas; no matter the project the benefits will be the same:
· Fast assembly: Perfect pieces delivered in order allows for an efficient and quick assembly; this can minimize the total schedule duration of a project.
· Cost-effective: Pre-fabricating the pieces reduces waste and allows for a fast assembly, cutting down on costs and encouraging efficiency across the trades.
· Safer work site: Many tasks are accomplished in Structurlam’s shop, removing the need for complicated work to be undertaken on site or at jarring heights.
· Reduced labour on site: Prefabrication ultimately requires less people on site to install the structure.
· Higher quality: Critical elements of the building are completed in a controlled shop environment.
An organized and efficient construction site is ultimately dependent on how well the trades involved work together. Incorporating pre-fabrication supports these efforts and encourages collaboration and close working relationships from the onset of the project. Utilizing the impressive power of pre-fabrication serves projects of all sizes and delivers tremendous benefits across the board.
In the range of services offered by the Siempelkamp Group, Pallmann plays an important role as the specialist for size-reduction technology and preparation systems. For plant operators from the wood-based materials industry, size-reduction equipment and preparation systems belong to the in-demand scope of supply. The main benefit for the customers: precision technology for the production of higher quality strands, flakes, and fibrous materials and the expertise in the ever more important area of recycling.
The Krefeld machine and plant engineering specialist therefore decided to continue the integration of the company from Zweibrücken. The 45-per cent increase in shareholding in Pallmann Maschinenfabrik GmbH & Co. KG and Ludwig Pallmann Verwaltungsgesellschaft mbH, last recorded in the beginning of 2016, was increased by Siempelkamp as of Dec. 15, 2016 to 75 per cent.
The taking over of a majority holding by the Siempelkamp Group was followed by a reorganization of the management of Pallmann Maschinenfabrik GmbH & Co. KG.
Dipl.-Kfm. Stefan Wissing, to date spokesman of the management of Siempelkamp Maschinen und Anlagenbau GmbH, was appointed spokesman of the management of Pallmann Maschinenfabrik GmbH & Co. KG with effect from Dec. 15, 2016.
At the same time, as the spokesman of the worldwide operating Siempelkamp Logistics & Service GmbH, Mr. Wissing is responsible for the entire service business of the Siempelkamp Group.
At the end of 2016, Dr.-Ing. Hans Fechner and Dr. Claus Maack are stepping down from the management of Pallmann Maschinenfabrik GmbH & Co. KG.
For 2017 many challenges are on the Pallmann agenda. We will focus on the process of fiberizing raw materials to fibers used in MDF production, the milling of raw materials to strands and flakes for particleboard and OSB production as well as the agglomeration process used in the production of insulation material. Thus, wood-plastic-composites made of wood flour and plastics or fiber-plastic-composites containing natural fibers from hemp or cork are produced. Under the heading “end of life tire”, the company furthermore will focus on the recycling of old tires.
Zweibrücken is home to 120 size reduction machines in the in-house research and development center. With this equipment the team focuses on process improvements, further development of our machines, and testing new developments. Customers from all over the world use the Pallman center to carry out tests with our process engineers to develop innovations for their industries.
The Siempelkamp Group is a supplier of technological equipment, and its three business units, Machine and Plant Engineering, Foundry Technology, and Engineering and Service, are oriented towards international markets. Siempelkamp Machine and Plant Engineering is a system supplier of press lines and complete plants for the wood-based materials industry, the metal forming industry, and the composites and rubber industry. Siempelkamp Foundry, one of the largest hand-molding foundries in the world, manufactures large cast components from cast iron with nodular graphite, with unit weights of up to 320 metric tons. Siempelkamp Engineering and Service specializes in the dismantling of nuclear facilities, and supplies transport and storage cask for radioactive waste. www.siempelkamp.com
Wood Markets’ five-year outlook report has analyzed the data.
As our forecasts have warned over the past few years, the timing of increased OSB supply — from the restarting of another seven curtailed OSB mills and two greenfield mills that will come on stream at some point in 2017-2021 — will determine the exact trend in prices over the forecast period. The forecast shows that OSB demand should increase by over 6 billion sf between 2016 and 2021 – that balances relatively well with the expected new capacity additions and normal annual incremental production gains. However, the exact timing of new capacity installations and their start-up date relative to rising demand will have the greatest impact on OSB prices – this “Goldilocks effect” of trying to get the temperature right, or the balance of OSB supply versus demand, will create some price volatility at various times in the next five years. For OSB, this is nothing new, where prices could easily move by US +/-$50/Msf or more in consecutive quarters.
As a result, OSB prices are expected to improve in 2017, as demand remains strong and production tightens, before new mills start up. With five OSB mills scheduled to start up by the end of 2018, the pendulum is expected to swing later in 2018, to a temporarily over-supplied market at times. As a result, OSB prices could ease in 2018 and bottom out in 2019 until the incremental supply base is absorbed. After that, rising prices are again expected.
Any potential delays in OSB mill capacity restarts will improve the whole market situation by minimizing any oversupply situations. The real question is: will any company’s strategy be to delay capacity restarts to allow for a better market situation, where their competitors who have restarted mills earlier will then benefit from this situation? History would suggest “no.” And the other question is: if the OSB market situation looks too good, will any new greenfield mills be announced to create more over-supply issues?
• U.S. South OSB production is forecast to almost meet the previous OSB peak production volume (of 2007) in 2017 – moving from 2016’s anticipated 11.2 billion sf to over 15 billion sf in 2021 (+7% annually from 2016).
• A growing concern will be the raw material supply and costs for existing, restarted and new OSB mills, particularly in the U.S. South. The rapid expansion of wood pellet manufacturing plants continues to rise at a very fast rate where some of the new pellet capacity as well as sawmill expansions (that take advantage of soaring lumber prices after Canadian export duties kick in) will both compete directly with OSB mills for pulp logs and small SYP sawlogs
• If new wood biomass competitors in the U.S. South drive raw material supply prices higher, Canadian OSB mills may develop a raw material cost advantage (over and above the lower Canadian dollar), relative to U.S. South mills, and could gain market share.
• The strength of the U.S. dollar versus most global currencies, combined with increasing US demand, will drive imports from Canada and attract more offshore supply higher over the forecast period.
• Canadian OSB exports are forecast to increase from 6 billion sf in 2016 to 7.6 billion sf by 2021 — 28% increase over this five year period, with 98% going to the strong U.S. market.
• From an estimated 8 billion sf in 2016, Canadian OSB output is forecast to rise to over 10 billion sf in 2021 — an average annual increase of 5.6% from 2016 to 2021.
Full details of the five-year outlook for the U.S. and Canada’s lumber and panels consumption, imports, exports, production and price trends are available in Wood Markets 2017 – The Solid Wood Products Outlook – 2017 to 2021.
Builders are familiar with standard plywood sheets that measure 4-feet wide, 8-feet long and between a quarter-inch and more than one-inch thick. The new panels made by the Freres Lumber Company of Lyons, Oregon, can be as much 12-feet wide, 48-feet long and 2-feet thick.
The company announced its new panels in October, capping more than a year of development and performance testing at Oregon State’s Advanced Wood Products Laboratory. “The results look very promising,” said Ari Sinha, assistant professor in OSU’s College of Forestry, who oversaw the tests. “This is a unique product with the potential for creating jobs in rural Oregon.”
Versatility is one of the benefits of the product known as a Mass Plywood Panel (MPP). “These panels can be customized for different applications. Because they have very good compression qualities, they could be used for columns as well as panels,” said Sinha.
The veneer manufacturing process enables manufacturers to orient wood grain and to distribute the defects found in smaller trees, such as knots, in a way that maintains the strength of the final product, Sinha added.
Tests in Sinha’s lab focused on the panels’ structural and physical properties such as density, adhesive bonding and resistance to the kinds of vertical and horizontal stresses experienced in an earthquake. Additional tests are planned after the first of the year.
Mass Plywood Panels can achieve the performance characteristics of a similar product known as Cross Laminated Timber panels with 20 to 30 per cent less wood.
“The market is wide enough that this product can compete in niche applications,” said Sinha. “MPP can be made to order.”
Sinha’s lab conducts wood-product testing year-around for companies in Oregon, Washington and other states. He evaluates connections between building components as well as component stresses stemming from wind, earthquakes and other forces.
With support from businesses, Oregon BEST and the U.S. Economic Development Administration, the new National Center for Advanced Wood Products Manufacturing and Design will continue to conduct tests on Mass Plywood Panels and on Cross Laminated Timber panels manufactured by companies in the Northwest and elsewhere. Housed at the OSU College of Forestry, the center is a collaboration between the college, the OSU College of Engineering and the University of Oregon School of Architecture and Allied Arts.
"Williams Lake Plywood has been operating at its Williams Lake location since 1953, but it didn’t start out as a West Fraser owned plant and it didn’t always make plywood. It was originally known as “All Fir”- finishing rough lumber from the surrounding bush mills."
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Aug. 12, 2016 - Higher demand and strong sales to construction accounts are reasons behind Hardwoods Distribution Inc.'s increase in sales in the second quarter. The company reports that total sales increased by 9.5% to $157.0 million from $143.4 million in Q2 2015. Hardwoods' U.S. operations increased sales by 3.7% to $95.5 million (USD).
July 26, 2016 - Norbord Inc. reported Adjusted EBITDA of $94 million for the second quarter of 2016 versus $19 million in the second quarter of 2015 and $61 million in the first quarter of 2016. The improvement versus both comparative periods is primarily due to higher North American oriented strand board (OSB) prices and shipment volumes.
North American operations generated Adjusted EBITDA of $85 million in the quarter compared to $11 million in the same quarter last year and $53 million in the prior quarter. European operations delivered Adjusted EBITDA of $11 million compared to $10 million in both comparative quarters.
"Our financial and operational performance continued to improve in the second quarter. Our Adjusted EBITDA has increased for six consecutive quarters and so far in 2016, we have generated $120 million more in Adjusted EBITDA than this time last year. Further, our Adjusted earnings were more than double the first quarter," said Peter Wijnbergen, Norbord's President and CEO. "Our North American mills produced at 96% of stated capacity during the quarter. The benchmark OSB spot price is currently up 44% since its February low, the highest level in over three years. We see further upside to our performance as recovering US housing starts, particularly single-family, continue to drive increasing OSB demand."
"In Europe, our panel business delivered a 10% improvement in Adjusted EBITDA. The underlying fundamentals of our European business remain favourable in spite of the political uncertainty following the Brexit referendum. The UK is a net importer of panelboard and as a primarily UK-based producer, the recent pressure on the Pound Sterling makes Norbord's domestically-produced panels more competitive than imports. Our modernization project at Inverness will lower our manufacturing costs and is underpinned by growing European OSB demand, largely driven by increasing substitution of OSB for higher cost plywood."
In North America, year-to-date US housing starts were up 7% versus the same period last year. Single-family starts, which use approximately three times more OSB than multi-family, increased by 13% and single-family permits were 10% higher. The seasonally-adjusted annualized rate was 1.19 million in June. The consensus forecast from US housing economists is for approximately 1.20 million starts in 2016, which suggests an 8% year-over-year improvement.
Second quarter North American benchmark OSB prices increased significantly from both the same quarter last year and the previous quarter as new home construction activity and OSB demand continue to improve. OSB prices increased rapidly during the month of May before pulling back in June, and the North Central benchmark price finished the quarter at $275 per thousand square feet (Msf) (7/16-inch basis). The North Central benchmark price averaged $264 per Msf for the quarter, compared to $193 per Msf in the same quarter last year and $226 per Msf in the previous quarter. In the South East region, where approximately 35% of Norbord's North American OSB capacity is located, benchmark prices averaged $245 per Msf in the quarter, compared to $174 in the same quarter last year and $215 in the prior quarter. In the Western Canada region, where approximately 30% of Norbord's North American capacity is located, benchmark prices averaged $242 per Msf in the quarter, compared to $152 in the same quarter last year and $191 in the previous quarter.
In Europe, Norbord's core panel markets in the UK and Germany continued to experience strong demand growth in the quarter. Second quarter average panel prices were in line with both the same quarter last year and the previous quarter. OSB prices were stable in the UK and continued to rise on the continent, resulting in average prices that were 4% higher year-over-year and 2% higher quarter-over-quarter. Medium density fibreboard (MDF) and particleboard prices were 5% lower year-over-year due to increased import competition when the Pound Sterling was stronger earlier this year, but were in line with the previous quarter.
Norbord's North American OSB shipments increased 8% year-over-year and 11% quarter-over-quarter due to fewer maintenance and market shuts and improved mill productivity. Norbord's operating North American OSB mills produced at 96% of stated capacity (excluding the two curtailed mills in Huguley, Alabama and Val-d'Or, Quebec), up from 89% in the same quarter last year and 92% in the prior quarter. Capacity utilization increased versus both comparative periods due to improved productivity, as well as fewer maintenance shuts and production curtailments, partially offset by approximately three weeks of lost production due to the fire at the High Level, Alberta mill. Three of Norbord's North American mills achieved quarterly production records.
Norbord's North American OSB cash production costs per unit (before mill profit share) decreased 6% year-to-date due to improved productivity, lower resin prices, improved raw material usages, fewer maintenance shuts and production curtailments and the weaker Canadian dollar, which were partially offset by higher supplies and maintenance costs.
In Europe, Norbord's shipments were 5% higher than the same quarter last year and 6% higher than the prior quarter. The European mills produced at 104% of stated capacity in the quarter compared to 101% in the same quarter last year and 100% in the prior quarter due to improved productivity. One of Norbord's European mills achieved a quarterly production record.
Norbord's mills delivered Margin Improvement Program (MIP) gains of $14 million year-to-date from improved productivity and lower raw material use as well as merger synergies and returns on recent capital investments. MIP gains are measured relative to the prior year at constant prices and exchange rates.
In the 15 months since the merger with Ainsworth, Norbord has captured $32 million in cumulative merger synergies ($39 million annualized), or 87% of the $45 million total commitment. The Company remains on track to deliver its full $45 million target by the end of 2016. In addition to these synergies, the merger has enabled the Company to avoid significant cash outlays it would otherwise have had to incur. Norbord estimates this capital and operating cost avoidance at $18 million, which includes transferring formerly idle assets, maintaining lower inventory levels and optimizing the timing of supplier payments.
In January 2016, the Board of Directors approved a $135 million investment over the next two years to modernize and expand the Company's Inverness, Scotland OSB mill. During the quarter, on-site construction work commenced and work began to move the unused second press from the Grande Prairie, Alberta mill to Inverness.
Capital investments year-to-date were $34 million (including $6 million related to the Inverness project) compared to $28 million in the first half of last year. Norbord's 2016 regular capital expenditure budget is $75 million. In addition, the Company expects to spend $45 million on the Inverness project in 2016.
Operating working capital was $163 million at quarter-end compared to $151 million at the end of the same quarter last year and $172 million at the end of the prior quarter. Working capital increased year-over-year primarily due to the impact of higher North American OSB prices on accounts receivable and the insurance receivable related to the High Level fire. Working capital decreased quarter-over-quarter primarily due to the seasonal inventory drawdown at the northern mills and the loss of log inventory due to the High Level fire (which is covered by insurance).
Due to improved Adjusted EBITDA, cash generated from operations for the first six months of 2016 was $86 million compared with $55 million of cash consumed in the same period of 2015.
At quarter-end, Norbord's unutilized liquidity improved by $50 million to $374 million and consisted of $12 million in cash and $362 million in unused credit lines. During the quarter, the Company repaid $55 million that had previously been drawn under the accounts receivable securitization program. In June 2016, the Company amended its bank lines to reset the tangible net worth covenant to $500 million and extend the maturity date for $225 million of the total aggregate commitment to May 2019. The remaining $20 million commitment matures in May 2018. The Company's tangible net worth was $799 million and net debt to total capitalization on a book basis was 48%. Both ratios remain well within bank covenants.
Norbord has $200 million senior secured notes that are due in February 2017, which the Company intends to permanently repay at maturity using cash on hand, cash generated from operations and if necessary, by drawing upon the accounts receivable securitization program.
On the back of strong North American pricing, we delivered Adjusted EBITDA of $94 million during the quarter (Adjusted earnings per share of $0.49) – over 50% more than the previous quarter. Across our global operations, manufacturing costs declined 4% year-over-year and we had record quarterly production at four mills. Our improved mill productivity enabled a 7% increase in sales volume year-over-year, consistent with the demand increases we had been forecasting. While still a small part of our revenues, sales to Asia are also improving, with exports to both Japan and China up over last year.
We continue to make progress on the synergies from our merger with Ainsworth. To-date we have captured $39 million (annualized) in cumulative synergies, or 87% of our overall $45 million target. In addition to these synergies, our now larger post-merger operations have enabled us to avoid significant cash outlays we would otherwise have had to incur. We estimate this capital and operating cost avoidance at $18 million, which includes transferring and putting formerly idle assets to productive use, maintaining lower inventory levels and optimizing the timing of supplier payments.
While we continue to allocate capital toward optimizing and growing our operations, we are also reducing our debt. During the second quarter we completely paid down our $55 million in accounts receivable securitization drawings, improving our liquidity position by more than $50 million to $374 million. Deleveraging remains a priority and we are committed to using our free cash flow and this liquidity to pay down our $200 million 2017 bonds when they come due next February.
Well positioned to navigate political uncertainty in the UK
While Norbord, like all companies active in the UK, is affected by the prevailing political environment following the referendum result, the underlying fundamentals and market dynamics that relate to our specific industry continue to be favourable. For context, our European business represents 24% of our shipments volume (of which about two-thirds remains in the UK) and contributed 12% of our Adjusted EBITDA this quarter. We are are well positioned to navigate the current economic uncertainties and this perspective is founded on two principal facts.
First, OSB represents only about 45% of structural panel consumption in Europe compared to over 65% in North America. Substitution of OSB for higher cost plywood has been driving double-digit demand growth for the past several years. Since the vast majority of competing plywood is imported from outside Europe and denominated in US dollars, it has become 10% more expensive in the UK market since the referendum. Further, the UK is a net importer of OSB, MDF and particleboard, and Norbord is the largest domestic panelboard producer. The Pound Sterling has also devalued almost 10% versus the Euro, making our domestically produced panels even more appealing for UK customers.
Second, there is a chronic undersupply of new housing in the UK. The UK government acknowledges that the number of new homes built annually needs to double from its current level. Over the past few years, a number of measures have been legislated to debottleneck the cumbersome planning process. This new supply may not be built out as quickly now as before the referendum, but the fact remains there is a housing gap that needs to be filled. While new home construction drives only about one-quarter of UK OSB demand, this continues to represent a significant opportunity for Norbord.
We are confident the underlying fundamentals are positive and that we have the right strategy and operational approach in place.
Our Inverness project is a unique and low-risk way to further strengthen our European business. Our $135 million project budget translates to $190 per thousand square feet of capacity. This is half the cost of greenfield and represents the new low water mark for capacity cost in our industry. The referendum has not changed the project economics and the benefits will be driven by significantly lowering the mill's manufacturing cost through the installation of larger scale, modern press technology that has been sitting idle at our Grande Prairie, Alberta mill. The opportunity is further underpinned by the site's access to a growing and low-cost wood basket in Europe.
July 25, 2016 - Toronto-based Norbord Inc. is positioned to profit from the rise in the OSB benchmark price after years of carefully building its presence in the OSB space.
According to a feature in the Globe & Mail, North American OSB prices in the first quarter of 2016 were 17 per cent higher than last year. That, and Norbord's acquisitions in the OSB sector position it for solid growth and profitability after years of challenges.
Chris Damas, an analyst and editor of BCMI Report, says the benchmark OSB price is now in the range of $306 (U.S.) per thousand square feet, well above the $229 15-year average.
Once a diversified forestry company, Norbord shed assets over the years to focus on OSB. Now boasting annual sales in the $1.5-billion range and a market capitalization of about $2.4-billion (Canadian), it bills itself as the world’s largest producer of OSB.
Read the complete feature here.
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International Mass Timber ConferenceTue Mar 28, 2017
March 28 & 30 Wood Dust Collection Seminars (B.C.)Tue Mar 28, 2017
Montreal Wood ConventionTue Mar 28, 2017
COFI Convention 2017Wed Apr 05, 2017 @ 8:00AM - 05:00PM