Economies of scale and trends in the size of southern forest industries

Abstract

In each of the major southern forest industries, the trend has been toward achieving economies of scale, that is, to build larger production units to reduce unit costs. Current minimum efficient plant size estimated by survivor analysis is 1,000 tons per day capacity for sulfate pulping, 100 million square feet (3/8- inch basis) annual capacity for softwood plywood, and 20 million board feet annual output for softwood lumber. Estimates of efficient size by the survivor technique reflect a plant's ability to cope with the total economic environment. In fact, additions to capital investment required th meet social and technological changes have virtually fored increased scale of output to keep unit costs in line.

Citation

Granskog, James E. 1978. Economies of scale and trends in the size of southern forest industries. Complete tree utilization of southern pine, proceedings of a symposium: 81-87 New Orleans, LA.