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Techno-economic analysis of producing engineered and thermally modified products from specialty wood species

By Peter Hall and Rosie Sargent, January 2022.

Download SWP-T141 (pdf)

Executive summary

This report covers an analysis of making a range of engineered and modified wood products from non-radiata species. The products and wood species considered were:

  • Non-durable eucalypt peeled veneer
  • Non-durable eucalypt sliced veneer
  • Non-durable eucalypt CLT
  • Non-durable eucalypt glulam beams
  • Non-durable eucalypt OSB
  • Non-durable eucalypt LVL
  • Thermally modified cypress
  • Douglas-fir CLT
  • Douglas-fir LVL
  • Douglas-fir glulam

The techno-economic analysis of these options was done using the WoodScape model with new products added and updated log prices (Douglas-fir, Eucalyptus and Cypress) as required.

Initially individual processes were assessed separately to determine their viability. Where a process looked to have reasonable financial returns the opportunities to cluster or co-locate complimentary processes were considered.

The highest ROCE, at 29.6%, was from the thermally modified Cypress. Other financially viable options included peeled Eucalyptus veneers (24%) and OSB (17.7%). It should be noted that these Eucalypt based operations take very different log grades as feedstocks and could be complimentary to each other in terms of utilising a tree crop.

The area of forest required to grow sufficient biomass to service the processing plants assessed are outlined below. The first table below shows the area of forest required to supply processes taking logs and the second for those taking lumber from a sawmill.

Process Peeled veneers Sliced veneers Euc. LVL D-fir LVL OSB
Volume in m3 27,000 35,000 55,000 46,000 172,000
Form in Logs Logs Logs Logs Logs
% of crop* 53% 53% 64% 53% 100%
Volume of harvest required m3 50,943 66,038 85,938 86,972 172,000
Ha per annum 71 92 119 98 367
Total ha 1,910 2,476 3,223 4,876 5,501

*This figure does not include any loss of logs to splitting. For peeler logs this can be as high as 50% of the logs becoming unsuitable for peeling. This implies that the area of forest required to meet the peeler volume demand could be much greater (as much as twice) with the split logs being suitable for sawing.

Process TMW Cypress Euc. CLT D-fir CLT Euc. Clulam D-fir Glulam
Volume in m3 9,225 35,000 35,000 10,000 10,000
Form in Lumber Lumber Lumber Lumber Lumber
% of crop* 23% 29% 29% 29% 29%
Volume of harvest required m3 40,109 120,690 120,690 34,483 34,483
Ha per annum 75 168 136 48 48
Total ha 2,999 4,526* 6,780 1,293 1,937**

*Area would double to get CLT plants with ROCE of ~20%
**Area would need to double to get sufficient material for a Douglas-fir glulam plant with a ROCE of 25%.


The opportunity identified for clustering of processes was based on non-durable Eucalypts with a combination of veneers and OSB being produced. This option would allow the use of the whole tree, with the better-quality logs from the lower stem being made into veneers and the upper stem logs going to OSB. Some of the residues from the veneer plant could be used as feedstock in the OSB process.

The ROCE of a cluster of non-durable Eucalypt veneers and OSB was estimated to be 20.6%. The scale of this operation was a combined log intake of 286,000 m3 per annum, with residues from the veneer mill being used in the OSB plant.

A cluster of a sawmill and a CLT plant was considered for both Eucalyptus and Douglas-fir. The Eucalyptus options was more attractive with a ROCE of around 22% compared to Douglas-fir at 8.5%.

A supply chain based on a Eucalyptus fastigata forest resource, taking all the logs (including chip grade logs) and processing the saw logs into a mix of CLT and chip and including a profit margin for forest growers, and contractors involved in the roading, harvesting and transport of logs was able to produce logs at cost less than current market prices and had a processing cluster that had a ROCE of around 21%.


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