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Certainly with the increasing costs of raw material inputs over time there are both important financial and environmental benefits to developing by-product markets. There is a long tradition in the forest products industry of developing by-product markets for what originally was considered waste wood developed as a result of the primary lumber of finished wood products being manufactured. Typical wood by-products from sawmilling and remanufacturing facilities include: low/off grade lumber, bark, wood blocks, chipper stock and wood chips as well as shavings and sawdust. Some of these have long been used in other products such as generating pulp to make paper or cardboard products. However, in many cases even as recently as forty years ago many such by-products in the US forest products industry we're simply "hogged" up and burned off at the manufacturing site to prevent their accumulation. The old "teepee" shaped burner was a common sight adjacent to most sawmills. Fortunately, a combination of new clean air regulations and the improved overall efficiency and economic benefit of finding higher value markets has prevailed for a net reduction as well as the maintenance of lower total cost of manufactured wood products to consumers.
Today a whole host of by-product markets have been developed to make use of such materials. Examples include landscape bark, pet bedding, hog fuel for co-generation of electricity, Oriented Strand Board, Flake board and more. Eastern Red Cedar, a formerly important pencil wood species, is today used for production of closet linings and specialty wood items. Given this specied aromatic qualities, the waste sawdust is often distilled to extract cedar oil which is used as an essential oil base in many perfumes and household products.
Our own company has a strong history of being a leader in the area of by-products market
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With our Incense-cedar pencil slat production our "Primary" driver products are reffered to as "wide ply" Select quality slats. These typically yield 8 to 10 pencils wide per slat depending upon the diameter of the pencil being produced. Our production of smaller narrow ply and shorter memo slats as well as lower grade recovery slats in addition to the prefered Select wide ply slats assures higher total yields of slats and pencils from the inbound Pencil Stock lumber. Marketing of such slats requires working closely with our pencil manufacturing customers to help them achieve the benefits of lower wood costs that can be obtained since there are generally trade offs in terms of efficiency and throughput. Memo slats for example are now a leading raw material source to produce "shorter" Cosmetic pencils. Certain narrow ply slats are more favorable for carpenter pencil widths than standard wide ply, etc. Slats even shorter than memos or narrower than standard production slats are also fingerjointed or now even edge glued to produce the wider standard length slats preferred by our customers for maximum throughput efficiency. Also now in our Thailand pencil facility we simply produce pencils ourselves on an OEM basis from Low Grade Slats for our other customers who prefer to focus just on using our more efficient higher quality slats in their higher labor cost environments.
With relocation of our pencil slat operations to China we have faced new challenges to develop
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