SIC 2435 Hardwood Veneer and Plywood
SIC 2435
This classification covers establishments primarily engaged in producing commercial hardwood veneer and those primarily engaged in manufacturing commercial plywood or prefinished hardwood plywood. This includes non-wood backed or faced veneer and nonwood faced plywood, constructed from veneer produced in the same establishment or from purchased veneer. Establishments primarily engaged in the production of veneer that is used in the same establishment for the manufacture of wood containers, such as fruit and vegetable baskets and wood boxes, are classified in various wood container manufacturing industries.
321211
Hardwood Veneer and Plywood Manufacturing
This industry primarily serves the building, construction, and home improvement industries, which set the pace for its growth or decline. In the late 2000s, the United States began to emerge from a housing slump that struck during the 1990s and early 2000s, fueling a modest recovery in the building products industries. Yet hardwood veneer and plywood producers continued to face challenges. Imports, particularly from China, severely dampened domestic sales by U.S. manufacturers, who protested both the quality and legality of Chinese products in the U.S. market. Heightened environmental standards also posed a threat to manufacturers, many of whom struggled to comply with regulations while remaining viable in a competitive market.
According to the U.S. Department of Commerce, nearly half of veneer and plywood output goes to construction, mainly residential. Roughly a quarter of the output is used in other lumber and wood products industries, with the remainder primarily used in furniture and fixtures.
Veneer consists of layers of wood peeled from logs. Plywood can then be made by gluing these veneer sheets together, alternating the direction of the grain for each sheet. Typically, plywood sheets are four feet by eight feet. Veneer also is glued to lumber, fiberboard, and medium density fiberboard, and is used in the production of oriented strand lumber and other engineered woods.
Plywood manufacturing and its related industries experienced hard times during the 1990s and the 2000s: a shortage of lumber increased operating costs, while a general economic decline resulted in numerous plant closings and lost jobs. Many small firms in the Pacific Northwest, dependent on timber from federal lands, were particularly affected. Industry critic Paul Ehinger claimed in a 1992 issue of Forest Industries that an estimated 133 sawmills, plywood, and veneer plants—20 percent of the mills in the Pacific Northwest—closed in this region between January 1990 and May 1992. This was an acceleration of a trend that saw 145 mills close in the 1980s. On the other hand, plywood firms with unlimited access to timber, such as those in the South, or large firms with private sources of timber, profited from the soaring prices of plywood. According to a report of S.G. Warburg & Co. Inc., plywood prices rose 67 percent between 1991 and 1993.
To cope with supply pressures, firms developed new products like engineered woods. Some observers expected this trend to shift the composition of output in the industry. As predicted, the plywood and veneer hardwood industry lost market share to establishments involved in the manufacture of...
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