Wood Components Manufacturers Assn.

Marietta, GA www.woodcomponents.org The WCMA has 135 members

Industry's Health

According to the WCMA's latest Dimension & Market Study and Cost of Doing Business Survey, sales volume for dimension and component parts are at record levels, while profit margins have never been lower. "There is a constant pressure to provide low cost, quality products that are produced with shorter lead times," said Steve Lawser, WCMA's executive director.

Lawser said he sees a movement toward the production of more value-added products by the associations membership in an effort to gain a competitive edge in an active but competitive segment of the woodworking industry. "Many sawmillers are now producing cut-to-size dimension products while producers of rough dimension are moving into the production of semi- and fully-machined component parts," Lawser said.

1999 Outlook

"Dimension and component sales will continue to grow as furniture, cabinet, millwork and related manufacturers outsource more of their components to independent component manufacturers," Lawser said. U.S. hardwood dimension and component shipments have increased significantly in recent years and are expected to reach $3.25 billion in 1998, an 11 percent increase over the previous year, according to WCMA's 1998 Market Study.

Lawser added that he thought the Fed's lowering of interest rates would be beneficial to the industry. "It will help prevent us from failing into a worldwide recession and will make borrowing easier for our industry," he said. "Since most of our members are privately-held companies, they have to borrow to finance new machinery and equipment and other improvements in their business. Lower interest rates will help lower their cost of doing business."

Industry Issues

Lawser said he sees cost containment as the biggest challenge to WCMA's membership. "Labor and raw material costs continue to rise, but strong competition and low margins point to the necessity for reducing production costs," Lawser said. "If margins do not improve, it will make it more difficult to fund the necessary capital investment to lower costs and meet increased production demands."

1998 Accomplishment

Lawser pointed to the addition of a Wood Technology Expo to the annual meeting as the association's biggest accomplishment in 1998. "The Wood Technology Expo provides our members with an update on the latest woodworking machinery, equipment, software, etc.," Lawser said. "It also allows our key suppliers the opportunity to meet directly with our members and actively participate in our annual meeting."

1999 Goal

The WCMA's plans for 1999 include helping members to improve profit margins through the development of a detailed yield study that will establish benchmarks for both cut first and rip first operations. "This study will allow our members to compare their yields and identify areas for yield improvement," Lawser said.

The WCMA annual meeting and Wood Technology Expo include programs designed to provide solutions to this and other key issues. The association also participates in several industry coalitions to promote and protect the interests and "band together to solve common problems," Lawser said.