Structural Changes in the Hardwood Face Veneer Industry

The hardwood face veneer industry has existed since the early 1800s in the United States. The industry is defined to include only those firms which slice veneer from flitches for furniture and, generally, more expensive end uses. The industry has seldom exceeded 50 firms during the last 150 years. Most of these firms have been located in the Midwest and have been family owned and managed. Conglomerate ownerships have generally failed in the past because of the craft nature of the business. Low returns on invested capital have also discouraged large corporate money managers. Since World War II, and particularly since 1965, there have been dramatic changes in the U.S. hardwood veneer industry. This has resulted from hardwood resources embargoes and political instabilities in former European colonies, increased family affluence in Western nations, improved veneering technology, and the relocation of European veneer entrepreneurial enterprise and capital to the United States. Foreign entrepreneurs, who came first as veneer log buyers in the 1950s, now dominate the domestic production of hardwood face veneers in the United States. Primarily oriented toward the export of veneers, they have been able to out-compete traditional manufacturers for export business through their integration with and contacts within the European veneer markets and secondary manufacturing firms. They have utilized the latest available technology and manufacturing systems. Their competitiveness has increased the prices of preferred hardwood species. It has also resulted in a revitalization of some domestically owned veneer firms distinguished by their aggressive management and adoption of improved technology. Traditional firms with “tired machines and tired personnel” are likely to continue to fall victim to this competitive environment.

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