A strategic plan for enhancing wood-based manufacturing activity in Fulton, Hamilton, Herkimer, Oneida, Oswego, Saratoga, Warren and Washington Counties
Sponsored by:
Adirondack North Country Association.
Funding made available through:
New York State Empire State Development Corporation
Technical Assistance by: NYS Department of Environmental Conservation, Forest Products
Utilization & Marketing Section
Prepared by:
Holmes & Associates, Saranac Lake,
New York Research and Analysis by: Timothy P. Holmes, Holmes & Associates, Saranac Lake
Chris Gearwar,Christian and Judy Gearwar,Christian; Lake George Forestry
Canadian-US Consulting Service at Clarkson University
Sarah K. Bogdanovitch, Paul Smiths College
Perry Hagenstein, Resources.Issues, Inc.
For a printed copy of the full report, contact ANCA at 518-891-6200
First and foremost, we wish to extend our thanks to the 129 wood
products business owners and managers who were willing to share their
knowledge, insights and concerns. Without their cooperation and
patience we would not have been able to accurately assess the status of
the industry and develop recommendations based on the interests,
capabilities and capacities of the region's existing businesses. Holmes
& Associates would also like to extend a note of appreciation to the
directors of many the region's agencies and organizations involved in
wood products development. They provided us with the necessary
background on past and current development activities so that this
effort could build on the valuable resources that exist in the region.
We are especially grateful for the assistance of staff at the Adirondack
North Country Association (ANCA). Terry Martino, ANCA's executive
director, reviewed numerous early drafts of the report and provided
project management assistance as well as other support. Carl Golas,
wood products specialist at ANCA, carried out a number of the
questionnaire surveys for the study team and provide significant insight
and information on the industry. Judy Tonks, executive secretary,
provided logistical assistance on a number of occasions. A special
thank you also to Robert Boice and Robert Quinn, ANCA's president and
vice-president respectively.
The study has benefited greatly from the insights and advice of the
project oversight committee. The committee members were Robert Boice,
Richard Cipperly, Stephen Erman, Carl Golas, David Mance, Thomas Martin,
Terry Martino, Jim Munroe, Henry Parnass, Robert Quinn, and Richard
Weigel. Jim Munroe, chair of ANCA's Natural Resources Committee, guided
the productive project meetings.
Holmes & Associates would like to extend a note of appreciation to a
number of individuals at the New York State Department of Conservation
who provide information, reports and other support throughout the
duration of the project, most notably Tom Martin, Tad Norton, Dick
Cipperly, and Kurt Swartz. Individuals at a few of the key wood
products organizations also supported the project in a number of ways,
including Peter Spadora of the Black River/St. Lawrence.RC&D, Douglas
Ververs at Cornell Cooperative Extension of Oswego County, and Kevin
King at the Empire State Forest Products Association.
Anthony Haden and Alan Beideck at the NYS Department of Labor, Saranac
Lake Office provided wood products employment information and assisted
in developing two of the maps in the report. At Holmes & Associates,
Stephen Harris and Nadia Korths assisted Tim Holmes in research and
reporting. We would like to recognize Judy Gearwar for her
determination and persistence in completing a majority of the business
questionnaires for the project. A note of thanks also goes to Fred Menz
at the Canadian-U.S. Business Consulting Service in Potsdam for his
direction of the graduate students who assisted on the project, as well
as to the students themselves: Shelley Morris, Elizabeth Stoll and Lisa
Taylor.
Finally, acknowledgement goes to two individuals who currently are
successful manufacturers of quality wood products within the region and
who are key proponents for regional wood products research and strategic
planning. We are grateful for the on-going support and assistance of
Terry Harden at Harden Furniture Company and Eugene Falvo at Falvo
Manufacturing Company.
ANCA
Adirondack North
Country Association
ESFPA
Empire State Forest
Products Association
ESD
Empire State
Development (formerly NYS Department of
Economic Development)
FRDC
Forest Resources
Development Council
ISO
International Standards
Organization
mbf
Thousand board
feet
mmbf
Million board
feet
NGO
Non-Governmental
Organization
NYSDEC
New York State
Department of Environmental
Conservation
NYSDED
New York State
Department of Economic Development (now
Empire State Development)
NYSDOL
New York State
Department of Labor
NYSDOT
New York State
Department of Transportation
RC & D
Resource Conservation
and Development Council
SUNY-ESF
State University of New
York, College of Environmental Science and
Forestry, Syracuse
FACE="ARIAL"
A number of wood industry terms are
used throughout the strategic
plan and glossary is provided near the end of this report. Following
are a few key definitions, adapted from Birss, Helen;
(1993:8):
Value Added - adding value to products at different processing
stages,
basically through the application of more labor and capital.
Secondary Processor - further manufactures a primary or
value-added product into a finished or end-use product.
The secondary wood products.i.secondary wood products;
industry is very
diverse and difficult to categorize. At one end of the spectrum are
standardized commodity items such as furniture cabinets,
windows, doors, wall and floor systems, pallets, boxes, etc. At the
other end are specialty, one-of-kind products produced by crafts people
for relatively small, niche markets. The full spectrum of secondary
wood products are represented in the eight county region, ranging from
Harden Furniture Company and Ethan Allen Company that employs hundreds
of people, to numerous entrepreneurs and partnerships producing custom
wood work and crafts.
Primary Processor - converts logs or "round wood" to
partially processed
raw material such as lumber or plywood. A value-added primary
processor further manufactures a primary product into component products
for specific markets. Many primary processors are engaged in value
added primary processing, such as planing lumber for siding
and flooring. While adding value, these primary activities are usually
not considered as secondary manufacturing.
A strategic plan for strengthening
wood-based manufacturing activity
in Fulton, Hamilton, Herkimer, Oneida, Oswego, Saratoga, Warren and Washington Counties
1. Executive Summary
The Adirondack North Country
Association (ANCA) has completed Working
with Wood, an action plan for strengthening the wood products industry
in the eight southern counties of the Adirondack North Country region.
The study area included Fulton, Hamilton, Herkimer, Oneida, Oswego,
Saratoga, Warren and Washington counties, however the findings apply to
the wood products industry throughout the region. The six month
planning effort was sponsored by ANCA in cooperation with the Empire
State Development Corporation and the Utilization & Marketing Section of
the New York State Department of Environmental Conservation. Holmes &
Associates of Saranac Lake conducted the research, with the assistance
of Gearwar, Christian; Gearwar, Christian;Lake George Forestry, the
Canadian-US Consulting Service at Clarkson University, and Sarah
Bogdanovitch of Paul Smiths College. The consultants carried out over
125 interviews with wood-based business owners to ensure the
recommendations reflect the interests, needs and capacities of
established businesses within the region.
Working with Wood outlines steps that will facilitate a closer
integration between the region's forests, sawmills, manufacturers and
markets through increased coordination and cooperation at the regional
and state level. A high priority recommendation is to intensify
information dissemination, training programs, and capital assistance
support that cater to the needs of region's wood-using businesses and
helps them exploit new markets and product possibilities. To that end,
the plan recommends that the region focus on becoming a supplier of
finished, or partially finished, wood products rather than a producer of
raw materials.
Background
The wood products industry is a major source of jobs in the Adirondack
North Country region, employing close to 14,000 people. In Lewis,
Washington and Essex counties, the wood products industry comprises over
10% of private sector employment. In Oswego, Clinton and Jefferson
counties, it accounts for over 5% of the private sector employment.
However, job growth in the wood products sector has been stagnant over
the last 10 years. That the industry has not seen a decline in that
time is promising, but demonstrates that more could be done to encourage
expansion of current businesses and the attraction of new firms.
Favorable economic conditions suggest a positive future for the
region's wood-based businesses, if they are positioned to capitalize on
the opportunities. For one, it is predicted that, with global
population growth and an increase in real-incomes worldwide, the
consumption of hardwoods and softwoods will increase by 56% and 27%
respectively over the next 50 years. Hardwood exports in the Northern
Forest area of Maine, Vermont, New Hampshire and New York have increased
dramatically in recent years from 76 to 337 million cubic feet. That
wood is going to Canada, Europe and Asia to be processed into finished
products, some of which are imported back into the United States.
Canada, the world's leading exporter of forest products, is becoming
more reliant on the timber resources of the Northern Forest, including
those of upstate New York.
Working with Wood discovered many positive indicators that
growth is
possible. A majority of the businesses surveyed expressed an interest
in expanding current manufacturing capabilities as well as introducing
new product lines. There appear to be opportunities for developing new
manufacturing facilities for the following wood products: hardwood
flooring, hardwood dimension, pre-fabricated structural grade building
materials, turning stock, turning and bending manufacturing facilities
and veneer.
An economic development effort concentrated on wood products makes sense
for the region and is feasible for a number of reasons:
There are also a number of reasons why now is the time to take
coordinated action. The inability to create more opportunities in
secondary manufacturing in the region, and thereby stemming the flow of
high quality logs, is of particular concern since employment in the
primary manufacturing sector is in decline. Mills in the northeast as a
whole are not as efficient as Canadian mills and have lost business to
Canada as a result. Continuing technological improvements at existing
mills in the region, as well as the competition, has led to work force
reduction in the primary sector. It is feared that the quality of life
in the Adirondack North Country region, as it pertains to working with
wood, will be drastically reduced if this trend continues.
Retention of existing wood-using businesses must be as high or a higher
priority than attraction of new firms. Otherwise, the business climate
will continue to sour as established businesses become discouraged by
incentives offered to new businesses. Without a coordinated, sustained
effort to develop a regional wood products support network, the region's
wood products entrepreneurs will have more difficulty competing in the
growing world economy.
The region will continue to lag behind other wood producing areas
unless the agencies and organizations acting in support of the wood products
industry work together more aggressively to coordinate their programs
and activities. Without coordination and cooperation, the region's wood
products support services will duplicate efforts in some areas while
leaving others unaddressed. In addition, without cooperation the
organizations will be competing for scarce funds and diminishing the
region's opportunities for attracting both public and private sector
funding to wood products development.
Regional Recommendations
A three-step regional wood products
development effort is recommended, comprised of coordination of all regional wood products
assistance programs, expanded information & training programs, and
professional marketing assistance focused on increasing the region's
competitive edge in national and international markets.
Coordination and cooperation among the many state and federal
agencies and non-profit organizations which support the wood-products
industry is critical. At this time, there are a number of wood products
support services in the region, however they are under-funded and could
better coordinate their programs and activities to avoid duplication and
ensure coverage in critical areas. The strategic plan describes the
activities of sixteen key organizations that will be instrumental in
implementing the recommendations in Working with Wood. Another fifty
participating organizations are identified. By maintaining the autonomy
and continuity of programs that have proven successful, while
coordinating new program offerings, the region's organizations can build
a wood products development coalition that will be effective, efficient
and flexible in responding to new trends in the industry.
During this period of increasing fiscal restraint at the State and
Federal levels, it is especially important that non-governmental
organizations such as ANCA and others take a lead role in
regional wood-products development. In addition, the direct involvement
of private industry in implementation of the plan is crucial. A number
of international wood product corporations (i.e., International Paper,
Georgia Pacific, Finch Pruyn, Harden Furniture, Ethan Allen, and others)
have a long history in the region and make a significant contribution to
the local economy. They stand to directly benefit from a growing and
vibrant regional wood products industry.
Listed below are some activities that could be undertaken to
facilitate more cooperation and communication amongst groups:
From the perspective of business owners, ANCA and other
organizations can best assist the wood products industry by
initiating
or improving information & training programs, especially in the
areas of
marketing, pricing, sources of raw materials, and general business
management. Working with Wood recognized the many and diverse
organizations currently involved in wood products development in the
region. The recommendation for coordination of activities among those
organizations recognizes that each organization should continue to focus
on their programming strengths. Overall, the collective effort must
focus on increasing the share of private investment in the programs.
The result will be increased employment opportunities as well as job
retention in a major industry of the Adirondack North Country region.
Up-to-date information can best be delivered to the business owners
and managers in the following formats:
The third key component of an expanded wood products
development strategy is professional marketing and enterprise development.
Business owners stated the desire for assistance in many areas of marketing. The
majority of small businesses do not have the expertise or resources to
develop marketing materials, seek out new markets or follow consumer
trends. Below are three recommendations that would help businesses
meet their marketing needs.
State-Wide Issues
Finally, there are several important
initiatives that, if changed,
will play a great role in enhancing the wood products industry. These
are issues that need to be addressed through a concerted effort of the
entire industry if they are to be change.
Funding and
Implementation
The following figures provide an
approximate first year cost for a
three-year program for the wood products development strategy for the
Adirondack North Country region. The focus of the funding is primarily
on the eight county study area, however some activities will pertain to
the region as a whole.
Marketing outreach
specialist: wood products
$50,000
Current wood products
industry program (now at ANCA)
65,000
Workshops (5 workshop
topics, each delivered at 3 locations in
the region @ $3,000 each)
45,000
Newsletter production
and distribution
20,000
Regional wood products
directory development
20,000
Educating the Public
(press releases, promotion
materials)
15,000
Annual meeting
& trade show
7,500
Internet web site
development
5,000
Coordination of the
network process.
20,000
Total estimated cost
for Year 1:
$247,500
In order to qualify for state and federal funding, cost sharing will be necessary. Private industry, foundations and non-governmental organizations (NGOs) will have to be approached for funding. Many of the region's major wood-using companies have already been active participants in improving the region's business climate and in enhancing regional, national and international recognition of the Adirondack North Country region's forest products industry. The participation of the private sector improves funding opportunities and enhances credibility for the regional wood products development effort.
The success of this regional wood products development strategy hinges on two critical aspects; program coordination and funding. The coordination is key to ensure that assisting organizations are being as efficient and cost effective as possible, as well as ensuring that their efforts are meeting the needs, goals and interests of the region's local businesses and communities. Funding is necessary to maintain and expand existing programs in the region, and to undertake new wood products development initiatives in response to regional, national and international trends and markets. Businesses, organizations and communities that value the wood products industry's contribution to local economies can benefit by working collectively to implement the recommended actions for improving and promoting the industry. The first, next step is to convene a meeting of all interested organizations to develop a cooperative, coordinated plan of action.