{"id":253,"date":"2010-06-16T09:43:00","date_gmt":"2010-06-16T17:43:00","guid":{"rendered":"http:\/\/www.woodinnovation.org\/?p=253"},"modified":"2010-06-16T09:43:00","modified_gmt":"2010-06-16T17:43:00","slug":"research-brief-opportunities-for-virginia-forest-product-companies-in-central-america","status":"publish","type":"post","link":"https:\/\/sim.sbio.vt.edu\/?p=253","title":{"rendered":"RESEARCH BRIEF: Opportunities for Virginia Forest Product Companies in Central America"},"content":{"rendered":"
By Scott Lyon, MS Candidate<\/address>\n
Virginia Tech<\/address>\n

Introduction<\/strong>\u00a0<\/p>\n

In the future, there will be a greater need for international forest products in Central America due to increasing population size, deforestation, and tourism.\u00a0 According to Salamone (2000), \u201cthe United States forest product companies have overlooked Central America as an opportunity to expand their markets<\/em>.\u201d Due to improvements in health care, sanitation and education the Central American population has almost quadrupled from 11 million in 1950 to 40 million in 2008 (Fox 1990; World Bank 2010).\u00a0\u00a0<\/p>\n

Deforestation has been and continues to be a major issue today for all Central American countries. The Panamanian government removed Law No. 7 that provided tax incentives for landowners to reforest their properties. This removal resulted in illegal logging and a decrease of reforestation projects (Munoz 2007). The natural forests of Costa Rica have been exploited due to shortages of wood for housing and furniture (Montagnini et al 2003).\u00a0<\/p>\n

Even in a global recession, tourism has been growing in Central American countries.\u00a0 Nicaragua had an 11% increase in tourists in the first five months of 2009 (Rogers 2009) and in the first year of breaking ground for the expansion of the canal in 2007, Panama has experienced an 11.2% increase in investment for tourism. Another example is Ecotourism, that has played a big part in Central America\u2019s tourism trade since 8% of the world\u2019s animal and plant species live in Central America (Schieber 2009). \u00a0More wood products will be needed as tourism increases in Central America; a shortage of hotel rooms was observed in 2007 due to a 19% increase in tourism since 2005 (Fallas 2008).\u00a0<\/p>\n

The purpose of this research is to evaluate potential market opportunities for Virginia forest product companies in Central America.\u00a0<\/p>\n

Virginian forest product companies have reduced the amount of wood products and furniture exported to Central American countries \u00a0(Figures 1 and 2) because past unstable financial markets, higher freight rates, tighter credit lines, and soft housing markets (VDACS 2008). The North American Industry Classification System (NAICS) for wood products manufacturing (321) and furniture and related products manufacturing (337) exported from Virginia to Central America is shown is Figures 1 and 2, respectively.\u00a0<\/p>\n

\"\"<\/a>
Figure 1. Exports of NAICS 321 from Virginia to Central American Countries<\/figcaption><\/figure>\n

In 2009, Guatemala, El Salvador and Honduras were the only Central American countries importing wood products from Virginia (Figure 1).\u00a0 Most Central American countries increased in amount of furniture and furniture parts being imported from Virginia in 2009, except for Panama (Figure 2).\u00a0 \u00a0\u00a0\u00a0<\/p>\n

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Figure 2. Exports of NAICS 337 from Virginia to Central American Countries<\/figcaption><\/figure>\n

In spring 2010, the research team from Virginia Tech visited top forest product importers in Panama and Costa Rica.\u00a0 The objectives for the visit were to (1) investigate local production, (2) investigate local demand, (3) identify potential trade barriers, and (4) look into the future demand and production for wood products.\u00a0<\/p>\n

Methods<\/strong>\u00a0<\/p>\n

Personal interviews were conducted with Costa Rican and Panamanian forest product companies, and governmental and non-governmental agencies. Two questionnaires were developed from secondary research of the Central American forest product market.\u00a0<\/p>\n

Results<\/strong>\u00a0<\/p>\n

The Costa Rican and Panamanian governmental officials stated that their governments do not promote the use of wood products in their country.\u00a0 Due to lack of government support the state of the forest products industry in Panama has declined since 1993 and today only 5 companies exist with more than 50 employees in Panama.\u00a0 The forests are owned by the government and a request to harvest must be submitted to the Panamanian forestry agency.\u00a0 Most of the land available for planting high valued timber species has disappeared because of urbanization. The remaining available land has poor quality soils and is not sufficient for planting.\u00a0\u00a0<\/p>\n

The wholesalers interviewed in both countries had 100-500 employees on average, with one wholesaler with over 2,000 employees.\u00a0 The wholesalers\u2019 wood product lines currently consists of cabinets, flooring, furniture, millwork, and home improvement items.\u00a0 Their customer, base which primarily uses insect and decay resistant cement and steel, consists of retailers, homeowners, contractors, and government offices.\u00a0 Historically these items have been preferred building materials because of the hot and humid climate in Central America, but cement and steel require a lot of energy and produce large amounts of carbon dioxide and other pollutants during the manufacturing process. \u00a0The Costa Rican Government \u00a0has mandated that the country be carbon neutral by 2021; this gives wood product companies an opportunity to expand more into building construction.\u00a0\u00a0<\/p>\n

\"\"<\/a>
Figure 3. Pine lumber supply at a Costa Rican forest products wholesaler. Author\u2019s Photo<\/figcaption><\/figure>\n

The companies interviewed largely import pressure treated lumber, softwood lumber (10-15 containers\/month), panels (1-10 containers\/month), hardwood veneer (1-10 containers\/month), flooring, and furniture\/parts (1-10 containers\/month).\u00a0 Some of the wood product wholesalers conducted business with wood product brokers in the U.S. for softwood lumber (Southern yellow pine) and panels, but all of the buyers were familiar with Southern yellow pine lumber from the United States. The companies in Panama and Costa Rica primarily import softwood lumber from Chile (See Figure 3), Brazil, Honduras, and Uruguay, which is dried to 12-14% moisture content. \u00a0Imported panel products consist of oriented strand board (OSB), plywood, medium-density fiberboard (MDF), particle board, and B-B plywood; Oiled face & Edge-Sealed edges (BBOES) plyform.\u00a0<\/p>\n

The majority of the buyers were familiar with Appalachian hardwoods and they were willing to import them if they were competitively priced with native tropical hardwood species in the region. Appalachian hardwoods can be used in doors, mouldings, cabinets, furniture, flooring and ceiling panels.\u00a0 Flooring and furniture are primarily manufactured by using dark reddish species, therefore, black cherry (Prunis serotina<\/em>) and black walnut (Juglans nigra<\/em>) from the Appalachian region could be a substitute for the tropical hardwood species currently used, such as Guanacaste (Enterolobium cyclocarpum)<\/em> (Figure 4).\u00a0<\/p>\n

\n
\n
\"\"<\/a>
Figure 3. Comparison between Appalachian hardwood species to a native tropical species. From left to right: Guanacaste (Enterolobium cyclocarpum), Black Cherry (Prunus serotina), Black Walnut (Juglans nigra)<\/figcaption><\/figure>\n<\/dl>\n
<\/dl>\n
<\/dl>\n
Transportation issues were addressed during the interviews.\u00a0 Wholesalers reported that logistics was not a problem when importing wood products.\u00a0 Products arriving to Panama primarily enter the country at the Panama City port.\u00a0 In Costa Rica, the products can arrive at two locations: Caldera Port, Puntarenas on the Pacific coast and Port of Lim\u00f3n on the Caribbean coast.\u00a0<\/dl>\n
Conclusions<\/strong><\/dl>\n<\/div>\n

This research supports the claim that United States forest product companies have not put enough effort into entering the forest product market in Panama and Costa Rica. Main conclusions indicate that the majority of the general public is unfamiliar with the properties and uses of wood as a building material since steel and cement are the currently preferred building materials.\u00a0 Forests in Panama and Costa Rica are not being harvested and the industry lacks support from the government, causing a reduction in the amount of raw material and production. An outside source of wood is needed to meet the needs of a growing region infrastructure.\u00a0\u00a0<\/p>\n

References<\/strong>\u00a0<\/p>\n

Fallas, H. 2008.\u00a0 Country Caters to Tourists with Tight Supply of Rooms.\u00a0 La Nacion. Section of Economy. March 10. Available at: http:\/\/www.nacion.com\u00a0<\/p>\n

Montagnini, F. et al. 2003.\u00a0 Enviornmental Services and Productivity of Native Species Plantations in Central America.\u00a0 XII World Forestry Congress, 2003.\u00a0 Quebec City, Canada.\u00a0<\/p>\n

Munoz, M. 2007. Menejo Forestal en Panama. La Presna<\/em>.\u00a0 November 25, 2007. Available at \u00a0http:\/\/biblioteca.presna.com\/contenido\/2007\/11\/25\/25-portada1.html\u00a0<\/p>\n

Quesada, H., R. L. Smith & J. Stopha 2009.\u00a0 Market Opportunities for Virginia\u2019s Wood Products in Central America.\u00a0 Federal-State Marketing Improvement Program Grant.\u00a0<\/p>\n

Rogers, N. 2009.\u00a0 Tourism Grows Despite Worldwide Slump. The Nica Times. <\/em>July 24-30, 2009.\u00a0 Available at:http:\/\/www.nicatimes.net\/nicaarchive\/2009_07\/0724091.htm\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n

Salamone A. 2000.\u00a0 Opportunities in Central America.\u00a0 Available at: \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 http:\/\/www.fas.usda.gov\/ffpd\/wood-circulars\/jun00\/camerica.pdf\u00a0<\/p>\n

Schieber, B. 2009.\u00a0 Guatemala at The International Tourism Trade Fair, FITUR 09. The Guatemala Times. <\/em>January 28, 2009.\u00a0<\/p>\n

Virginia Department of Agriculture and Consumer Services (VDACS), 2008. Virginia Forest Products Export News. Fall-Winter 2008.\u00a0 Available at: http:\/\/www.vdacs.virginia.gov\/international\/pdf\/forestnews.pdf\u00a0<\/p>\n

Virginia Economic Development Partnership (VEDP), 2008.\u00a0 Wood Products In Virginia.\u00a0 Available at: www.yesvirginia.org\u00a0<\/p>\n

World Bank, 2010.\u00a0 Country Data Profile. The World Bank Group.\u00a0 Available at: http:\/\/ddp-ext.worldbank.org\/<\/p>\n","protected":false},"excerpt":{"rendered":"

By Scott Lyon, MS Candidate Virginia Tech Introduction\u00a0 In the future, there will be a greater need for international forest products in Central America due to increasing population size, deforestation, and tourism.\u00a0 According to Salamone (2000), \u201cthe United States forest product companies have overlooked Central America as an opportunity to expand their markets.\u201d Due to … Continue reading “RESEARCH BRIEF: Opportunities for Virginia Forest Product Companies in Central America”<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,8],"tags":[],"class_list":["post-253","post","type-post","status-publish","format-standard","hentry","category-marketing","category-news"],"_links":{"self":[{"href":"https:\/\/sim.sbio.vt.edu\/index.php?rest_route=\/wp\/v2\/posts\/253","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sim.sbio.vt.edu\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sim.sbio.vt.edu\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sim.sbio.vt.edu\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/sim.sbio.vt.edu\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=253"}],"version-history":[{"count":0,"href":"https:\/\/sim.sbio.vt.edu\/index.php?rest_route=\/wp\/v2\/posts\/253\/revisions"}],"wp:attachment":[{"href":"https:\/\/sim.sbio.vt.edu\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=253"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sim.sbio.vt.edu\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=253"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sim.sbio.vt.edu\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=253"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}