Economic Feasibility and Market Potential for Producing Yellow-Poplar Oriented Strandboard in the Appalachians

The economic feasibility and associated market potential for an oriented strandboard (OSB) plant utilizing yellow-poplar in the Elkins, W. Va., region were examined. The timber resource was more than sufficient to support an OSB facility that would produce 120 million square feet (MMSF) on a 3/8-inch basis per year. Using an 18-year life, 14 percent discount rate, and a 49 percent tax on profits, the analysis estimated an average after-tax net present value of $1.8 million with cumulative discounted cash flows turning positive in the sixth year. Regional sheathing market size (4,168 MMSF) within 500 miles was sufficiently large to require only a 2.3 percent penetration to market all of the facility’s sheathing production (96 MMSF). The remaining 24 MMSF of nonsheathing production would be marketed in the growing homeowner and industrial markets.

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