Abundant Demand - Hawaii Lumber Products Association

By Judith Shinsato
In the past, the wood and lumber industry has
been labeled as being anything but environmentally
friendly, according to many involved in the industry.
This is a misconception that it wants to set straight. As
with other markets, wood and lumber has its own issues
to address. But overall, not only does it have one of the
lowest environmental impacts, but also the consumption
of wood and lumber has reached record level demand in
2004. High demand and wood’s inherent advantages, along
with continuing developments to improve other characteristics
of wood, help ensure that wood and lumber will continue to
play a vital role in Hawaii’s construction industry.
Abundant Demand
One of the main messages that
the wood industry is determined to
get out addresses wood consumption and environmental concerns as
it relates to supply and demand.
First off, “More lumber and
wood products are used today than
ever before,” says Wayne Lincoln,
vice president of sales and marketing at Honsador Lumber Corp.
“In fact, when final numbers
come in for 2004, we’re anticipating that lumber consumption will
be at an all-time record 59.7 billion board feet, up about 5 percent
from the previous year,” says Butch
Bernhardt, director of information services of the Western Wood
Products Association (WWPA). “The
previous year was the record, so
we’re in a time of unprecedented
lumber demand in this decade.” It
is the sixth time in the past eight
years that lumber demand has set
a new record. “It can be attributed,
by and large, to the strong housing
market. We’re expecting housing
starts [in 2004] to finish above 1.9
million units. Housing and repair &
64 February 2005 Building Industry
remodeling (R&R), which is essentially residential, comprise about 75
percent of the lumber consumed
each year. The low interest rates
we’ve experienced in the past few
years have been very conducive to
building and construction.”
“The demand for wood fiber
and lumber products has been on
the rise both in Hawaii and nationally,” adds Hap Person, president
of HWT Co., Ltd. and the Hawaii
Lumber Products Association. “With
a strong home construction market
being the leading growth segment
in the total U.S. economy for the
past few years, lumber products
make up a majority of the building
materials used in home construction in North America.”
Terry Inglett, president of
Honsador, says, “In Hawaii, as in
the nation, the desire to construct
new homes, move into higherend homes and renovate through
refinancing, is forecasted by leading authorities to remain strong
well beyond 2005.” Quoting from
a study done by the Joint Center
for Housing Studies at Harvard
University, Inglett adds, “Despite
growing concern over the pace of
development, housing construction
over the next 10 years is likely to
exceed that over the last 10.”
Although many expect interest
rates to rise, impacting the housing
market and lumber consumption in
turn, demand for wood and lumber
should still remain high. “We anticipate demand to decline to 57.2
billion board feet in 2005, which,
while down, will still be the second
highest on record,” says Bernhardt.
“The high demand for lumber
has led to increased prices as well,”
acknowledges Larry Lanning, marketing director of Hardware Hawaii
Ace. “The difference is the lumber
supply is infinite, because we constantly [can] grow more, and prices
then return to normal as the supply
catches up with demand.”
Inglett confirms this statement,
“A published report on the composite price for framing lumber and
paneling of all types at the end of
December 2004 indicated that prices are down significantly compared
to the all-time peaks reached during
the second and third quarters of
2004, as a result of increases in the
supply side to meet demand,” but
average prices remain above the
prices of a year ago.
Person points out, however, that
the price increase for wood and
lumber are not nearly as high as it
is for other building materials. “It’s
not only the North American markets, but markets worldwide, like
China, which are growing and have
increasing needs for larger amounts
of the materials used to build highways, bridges, high-rise buildings or
other major structures to support
commercial and financial growth.”
Person says other sources have
quoted that other building material prices have gone up over 60
percent in 2004. “During the same
period in 2004, lumber pricing has
come down from 15 to 20 percent,
depending on the dimension and
grade. Some of this price control
is due to the improved practice
of replanting forest lands over the
past 20 to 30 years, better use of
the entire tree and the removal of
the import tax on Canadian lumber
supplies.”
Ample Supply
While lumber and wood is at one
of its highest consumption rates,
the industry is also quick to assure
that supply is also abundant.
“We’re not in any danger of running out,” says Honsador’s Lincoln.
“The biggest issue confronting
wood is the non-stop criticism of
forestry practices and the mistaken
belief that using wood products
is somehow bad for the environment,” says Al Heberer, communications manager of Osmose.
“The environmental movement
has unfortunately led the public
into believing that when people
use wood, they cause the loss of
forests,” states Dr. Patrick Moore,
co-founder of Greenpeace and now
president of Greenspirit, an environmental consulting organization.
“This widespread guilt is misplaced
because North America’s forests are
not disappearing. In fact, there is
about the same amount of forest
cover today as there was 100 years
ago, even though we
consume more wood per
capita than any other region
in the world. When we buy
wood, we are sending a signal to
plant more trees to satisfy demand.
If there were no demand for wood,
landowners would clear away the
forest and grow something else
instead.”
“There are more trees right now
than there were 100 years ago,”
continues Lincoln. “The reason
for that is the good management
of the forests, the stewardship
that large corporations, such as
Weyerhauser and Georgia-Pacific
and the like, have employed. They
spend millions and millions of dollars maintaining those forests, making sure that there’s perpetuation
of that crop. After all, their futures
depend on it.”
“Wood is a renewable resource,”
adds Person. “The more demand
we have for wood the more forest
land that will be planted to meet
the demand.” Other building materials, though recyclable, rely on a
fixed amount of mineral resource,
he says. “The lumber industry has
made great strides over the past
20 to 30 years in the management
of private and federal forest lands
to actually increase the amount
and quality of trees grown per
acre, while reducing the amount of
environmental impact. Thousands
of acres of planted forests are now
mature and ready for harvest.”
Lanning says, “Probably the most
exciting trend in lumber is the way
it is produced. … Lumber is grown
as scientifically as any crop, and
more and more it can be harvested
with minimum effect on the surrounding environment. The good
news is that the increased demand
for lumber is an increased demand
for trees. New developments in the
use of the tree, such as improved
cutting and milling techniques
and the ability to utilize every part
of the log, make it an extremely
efficient commodity. Engineered
woods of all kinds are utilizing what
used to be waste wood to make
stronger, better and cheaper products.”
Koala wood flooring, provided by
Pacific American Lumber
Quick Fact
The single oldest living thing
on Earth is a tree, a 4,700-yearold bristlecone pine tree in
Nevada. It was growing when
the Egyptians built the pyramids.
Graham Builders built this home with
wood framing.
February 2005 Building Industry 65
“All said,” continues Inglett, “the
vast acreage of sustainable, managed
forests under the control of U.S.
industry and the U.S. government,
coupled with the agreements and
import programs in place with our
trading partners, …is strong assurance that a ready supply of lumber
and wood will always be available
to America’s builders; and further,
it will never …become depleted
because high wood use will always
result in more forests being planted,
harvested and maintained.”
Although both demand and
supply are high, the importation of
lumber is a growing issue for the
U.S. lumber industry, according to
WWPA’s Bernhardt. “We get our
lumber from a variety of sources.
Here in this country, 38 percent
of the lumber is imported, mostly
from Canada. In 2004, Canada is
expected to have a record volume
of over 20 billion board feet of
lumber shipped into this market.
We have another 2.2 billion board
Housing and repair & remodeling (R&R), which is essentially residential, comprise
about 75 percent of the lumber consumed each year.
feet of non-Canadian imports, predominantly from South America,
Europe and New Zealand. Those
products have become a big part
of the United States lumber supply
and have been able to fulfill the
demand pretty easily. There’s now
Quick Fact
Ginkgo trees provided food for
dinosaurs, and yet they can still
be found in backyards today.
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Quick Fact
There are 747 million acres of
forestland in the United States.
About one-third of the United
States is covered by forests.
anywhere near California’s environmental standards? Think again. So
what is the answer to protecting
the world’s forests? Education and
harvesting more of our own wood
in a sustainable way from…wellmanaged forests.”
Another issue, though not
unique to the lumber industry
alone, is the consolidation of companies. “There are more and more
big companies buying out small
companies,” says Phil McInerny of
Pacific Building Materials, Inc.
“We’ve seen a growing percentage of production, for example, in
the West comes from mills that are
producing more than a hundred
million board feet of lumber a year,
and most of those are part of larger
companies that have multiple facilities,” explains Bernhardt. “In 1987,
we had 702 mills in this region;
today we have about 240.”
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Versatile, Durable
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The Hardware Hawaii lumber yard
more than a billion board feet of
lumber coming from Europe. This
is just softwood lumber, predominantly structural lumber. … In the
context of a 60 billion board feet
market, it’s not a lot; however, in a
market that’s pretty well balanced
between supply and demand, it
does have an impact. The fact that
Austrian studs can be sold at a
more competitive price than western mill products in markets in the
Midwest is definitely a new trend.
The current 38 percent is an alltime record; 22.6 billion board feet
of imports is expected for 2004. It
68 February 2005 Building Industry
has grown steadily, in line with the
growth in demand.”
In an argument for using
domestically grown wood, Nicole
Mashore states in an article for The
Merchant Magazine in November
2004, “According to University of
California-Berkeley forestry professor
emeritus, William Libby, for every
acre of forestland not harvested
for timber here, at least two acres
must be harvested in tropical forests. Do you think the forestry and
harvesting practices in places like
Brazil, Chile and other emerging
international timber players come
The reason for wood’s continued
demand and consumption throughout the nation is due to its many
strengths, say those in the industry.
“Wood is definitely versatile,”
says Hardware Hawaii’s Lanning.
“Any carpenter can cut it, shape
it, bend it; build square, angled or
round; frame with it; build post and
beam; use it for flooring, decking,
roofing, staircases, moulding, doors,
trim, and more.”
McInerny agrees, “Wood: Shape
it, cut it, mold it, chop it.”
Lumber is also durable and
strong. “Lumber is often not seen
as durable because it can rot and
termites can eat it. However, if
properly treated lumber is used in
compliance with the building code,
it will not rot and termites will not
eat it. There are many examples
of wood construction lasting over
Wood-framed military cottages at
Barking Sands, Kauai
Albert C. Kobayashi, Inc. is the general
contractor for these Waiehu Kou woodframed homes.
a thousand years,” continues
Lanning.
“We have wood homes in this
country that have been around for
100-150 years,” Bernhardt adds.
“If you look at the overall housing
stock in the United States, about
106 million homes, 51 million of
those were built before 1960 and
they are still in use and still providing shelter. One of the biggest
issues facing lumber, in terms of
structural life for a home, is exposure to moisture. With proper maintenance, that can easily be handled.
We do see a lot of remodeling,
but it’s not because of structural
problems. It’s because the [existing]
living spaces don’t quite meet the
societal needs of today.
“I think cost competitiveness,
particularly for residential construction, is a good strength for lumber
products. Availability is another
huge advantage. You can pretty
much go anywhere in this country
and find lumber. The vast availability and distribution system that’s
part of the lumber marketplace is
an advantage.”
“And wood is beautiful. Ceilings
can be left open — the beams and
roof decking add to the beauty
and warmth of the room. Crown
moulding provides the finishing touch to beautiful rooms.
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February 2005 Building Industry 69
Hardwood floors are a tradition in
the finest homes and not just oak,
but mahogany, koa and ipe,” says
Lanning.
“The ready availability of supply, the cost advantages compared
to other products, the flexibility
to make field changes and add
features of beauty and utility and
the freedom to be very creative
in design all support the sustained trend of lumber and wood
use in home construction,” says
Honsador’s Inglett.
But perhaps the one quality of
wood that manufacturers and distributors alike would like to emphasize above all others is that it is
renewable.
“Wood…is the only renewable
resource…with the lowest environmental impact of any building
material used today,” states HWT’s
Person. “This information is backed
up by a study recently released by
Although lumber consumption is expected to decline to 57.2 billion board feet in
2005, it will still be the second highest on record.
Consortium on Renewable Industrial
Materials (CORRIM), a non-profit
corporation made up of 15 research
universities.”
The report used typical building
designs to construct hypothetical homes with competing build-
ing materials in a cold climate
(Minnesota) and warm, humid
climate (Georgia) and studied the
environmental effects across the
entire life cycle of the home. The
study determined that wood framing used 17 percent less energy
Honsador Sold
The Kauai Technology Center is woodframed with an interior open-beam ceiling.
Lumber consumption in 2004 hit an alltime record 59.7 billion board feet.
70 February 2005 Building Industry
The sale of building materials distributor Honsador Lumber
Corporation, estimated at more than $50 million, was completed in
November 2004. The purchase includes Honsador and its two affiliate
companies, Honolulu Wood Treating and Ariel Truss.
The primary investor is a Cleveland-based, nationally-recognized private investment firm Key Principal Partners (KPP), an affiliate of the $84
billion financial services firm KeyCorp. Other partners in the deal are RDV
Corp., an investment company owned by Richard DeVos, co-founder of
Amway Corp. (which earns $6 billion a year in sales), and Hawaiian Land
Development Corp., owned by local developer Jeffrey Stone, managing
partner of Ko Olina Partners LLC.
Jim Pappas, former owner of Honsador and its affiliates, said he had
not been actively seeking to sell the business, but was impressed by each
company’s local ties. “They genuinely value our company legacy and
our business philosophies.” Greg Davis, a principal of KPP is a member
of Honsador’s board of directors, and RDV Corp. partnered with Stone in
the acquisition of Ko Olina Resort & Marina in 1998. “We expect to be
smart, innovative and price sensitive, and we look forward to building on
the foundation of excellence that is Honsador’s legacy,” says Davis.
“By focusing some of Honsador’s business on West Oahu — including
direct shipment of supplies into the Kalaeloa deep draft harbor, we can
reduce traffic,” adds Stone. “We can affect jobs, economics and building supplies for this area in an innovative manner. It is a direction that its
[former] owner has had for some time.”
Pappas will remain involved in Honsador as a member of the company’s board of directors and as a salaried advisor. Current company leadership expects to retain all 213 employees.
Founded in 1935 as Honolulu Sash & Door, Honsador has offices
on Oahu, Maui, Kauai and the Big Island and also operates a facility in
Portland, Ore.
Today’s technologies allow nearly 100 percent of a tree to be used, with hardly
any waste.
and exhibited between 26 and 31
percent less potential for causing
global warming than the other
materials used.
“Wood and lumber is a natural
and renewable building material
that is affordable and has a natural
beauty,” concludes Dan Hayashi of
City Mill Co. Ltd.
Timely Trends
As wood is one of the oldest
building materials used today, time
and technology continue to find
ways to improve both the material
and the end products produced
from it.
“As with most high quality building products, improved technology
and processing of the raw materials
continue to provide new innovations in design strength, better use
with reduced waste and improved
durability in applications,” Person
says. “Engineered lumber products
are a fast growing segment of the
building framing design. [These]
products use wood fiber to create stronger, lighter, straighter and
more durable structural load-bearing products while reducing the
total amount of wood resource
used. Many of the new products
use timber from tree species which
were often not used during a forest harvest in the past. Many of the
engineered products are produced
with a safe and effective wood
treatment added at the time of production for complete protection of
the wood fiber over the intended
useful life of the product.”
“Oriented strand board (OSB)
is rapidly replacing plywood for
roofs, walls, floors and all types of
sheathing based on pricing, relative strength, incorporated termite
treatment and the addition of an
aluminum foil layer as a highly
Quick Fact
In 1998, over 1.6 billion tree
seedlings were planted in the
United States — that’s more than
five new trees for each American.
The lumber rack at Hardware Hawaii
72 February 2005 Building Industry
A wood-framed home in Makiki
Ipe wood (shown here), is naturally
more resistant to termites and therefore
ideal for use in flooring and decking.
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Photo courtesy of Pacific American Lumber.
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effective radiant barrier. An added
benefit is that OSB is able to use
fiber from non-traditional tree species of small size and what little
waste is generated is processed
for paper pulp or burned to create
processing energy in place of fossil
fuels,” says Inglett.
“Treated composite trims are
also gaining acceptance and have
become very popular with contractors and homeowners alike
because of appearance, durability
and minimal waste at the jobsite.
“Termite treatment using
environmentally-friendly compounds derived from salt, such as
sodium borate (Hibor), zinc borate
and others as approved by the
Environmental Protection Agency
and building codes, when coupled
with proper construction design
and installation, provides long-term,
warranted protection such that concerns about termites in structural
lumber and panels are no longer
relevant.”
Jerry Parks, director of marketing services for the Western Wood
Preservers Institute, adds, “With
the new generation of preservatives, specifically ACQ and Copper
Azole, it is very important to fol-
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low the International Building and
Residential Code’s requirements
in terms of fasteners and connectors. The codes require ‘fasteners
for preservative-treated and fireretardant-treated wood shall be of
hot-dipped zinc coated galvanized
steel, stainless steel, silicon bronze
or copper.’ Section 323.3 of the
IRC does carry an exception for
one-half inch (12.7mm) diameter
or greater steel bolts.”
“Homeowners always ask about
termites, and we tell them a lot of it
has more to do with poor design,”
says Danny Graham, president of
Graham Builders, Inc., which is
reaping the benefits of a thriving
housing market. Not only are housing starts doing well, but the company is also doing a lot of remodeling.
The trend in remodeling, according
to Graham, is the increasing value
of the remodeling projects, some of
them rivaling prices of new homes.
“Construction costs have gone up,
Stacked lumber, ready for sale at the Hardware Hawaii yard
but the scope
of work is
also bigger. Customers want to do
larger additions. Another concern
with regard to cost and a busy
industry is the time spent between
the signing of the contract and
the time we actually get started.
Because of our backlog, if you came
to me today and wanted us to build
a home, we would start construction in September. And people are
willing to wait. But prices of building materials are going up. Once
we sign the contract, we cannot go
back to the owner. So, we have to
be very careful, or it can really hurt
us.”
At Wayne’s Lumber, President
Wayne Rapoza will begin offering
a house package. “It’s not pre-fab,
but we’ll supply all the materials
for a three or four bedroom home.
It will be a plantation style house
with a 10-foot wide porch and EON
plastic decking. We’ll supply pretty
much everything except the things
we don’t carry: plumbing, electrical fixtures, and the cabinets and
countertops. Everything else will be
included and delivered, if on Oahu,
to the job site, if the neighbor
islands, to the dock. The plans are
already drawn and preapproved.
Quick Fact
More than 5,000 things are
made from trees: houses, furniture, baseball bats, crutches,
fences, garden mulch, books,
newspapers, movie tickets
— even clothing, carpeting and
toothpaste.
The strong demand for lumber is due in large part to booming residential construction.
74 February 2005 Building Industry
A Kona housing development utilizing
wood framing
The customer just needs a plot
plan.” Rapoza says he is planning to introduce the package at the Building Industry
Association Home & Remodeling
Show this month. “We are a family-oriented business and our main
concern is providing a good product and good service.”
With regard to hardwoods, Chris
Neid, president of Pacific American
Lumber — which has a hardwood
flooring division as well as a hardwood lumber and plywood division
— says this market is also seeing
substantial growth. Neid says three
stigmas have haunted the hardwood flooring market in the past:
price, maintenance and underlying
environmental issues, all of which
Quick Fact
Some chewing gums are made
from the sap of the Sapodilla tree.
A Graham Builders wood-framed home
76 February 2005 Building Industry
are being addressed, allowing the
demand for hardwoods to grow.
“With the amount of manufacturing going on across the United
States and around the world in
hardwood flooring, it’s become a
very competitive market, so pricing
has dropped and become a more
affordable product as a floor surface. Also, the technology of today’s
durable urethane finishes also have
made hardwood flooring easier to
maintain.
“Obviously, the biggest concern
in Hawaii with wood is termites. It
will always be an issue. My general
preference is to tell consumers to
do everything necessary before the
floor is installed to make sure the
structural and foundation part of
the whole house has been prepared
and treated properly for termites
and the hardwood flooring should
be fine. Also, there are woods out
there that are much more resistant
to termites, in particular, a lot of
the import products that have a
high density or have a resistant
biological make-up. We sell a ton of
hardwoods that are coming out of
South America, Africa and Australia
that are extremely dense and therefore more resistant to termites,
Jatoba and Cumaru wood, for
example. Ipe wood can be used for
decking as well as interior flooring
and millwork and is replacing teak
for military vessels as far as decking,
because of its resistance not only
to infestation but also to rot and
things of that nature. It’s been really
well received and is performing well
in Hawaii.”
Cork flooring, which Pacific
American Lumber introduced
recently, also has been well
received. “It has a lot of natural
attributes that make it very attractive to homeowners and is very
soft and warm underfoot. It’s environmentally-friendly, because it is
harvested from the bark; you don’t
Many anticipate housing construction
over the next 10 years to exceed that
over the last 10.
have to cut down the tree. It’s a
great sound-deadening product.
Also it has naturally hypoallergenic
attributes that make it very popular
in institutional settings like hospitals
and classrooms, but it’s most popular for residential uses.”
Nied says another factor contributing to the increased demand for
hardwood is, “when it comes to
flooring, people are moving back
to the more natural products and
warmer tones in the house.”
Few building materials can
match the warmth and natural
beauty wood offers along with its
versatility, durability as well as its
cost competitiveness. Add the fact
that wood is also renewable, and
it is a truly unique resource — all
of which will keep it standing tall
as it rides the wave of the current
upbeat housing market.
February 2005 Building Industry 77