Integrated Business Project 1Viscoelastic Thermal Compression of Wood(or “compressed wood”)- Grover, Hahn (& Jenkins, Nguyen)1Tuesday, October 27, 2009Brief Overview of TechnologyInventor: Professor Kamke, Forestry Department1. Employs pressure and steam (provided by the water in the virgin wood)2. Batch process cycle time = Approx. 30 minutes2Tuesday, October 27, 2009Technology Benefits & Drawbacks1. Possible because 1/2 volume of virgin wood is void cell-space.2. Treated wood is “hydrophobic.”3. Uses “crop products” as raw materials.4. Entry into industries previously closed to wood use.BENEFIT: Successful Increase in Strength/Density up to 4x1. Higher raw material requirements: compression reduces volume by 67%.2. Could cost approx. 20% more.3. Once the water is absorbed, the impact is worse than on virgin wood.4. Ambiguity about whether the product can be stained or bleached.POTENTIAL DRAWBACKS3Tuesday, October 27, 2009“Hardness” Comparison...4Tuesday, October 27, 2009Growth Rate ComparisonNameGrowRate/YrMature HeightWillow Oak2-3 Ft.Up to 70 Ft.White Pine1-3Ft.60-70 Ft.Douglas Fir1-3 Ft.40-60 Ft.Hybrid Poplar8-10 Ft.50-60 Ft.5Tuesday, October 27, 2009Licensing from OSULumber and Wood ProductsNew BusinessExisting BusinessProduct Mfg.Raw Mat. Mfg.Consumer I/FHome DepotB-2-BHome DepotB-2-BB-2-CFranchisingB-2-C1. Buy Machine2. Produce VTC Wood1. Furniture (Herman Miller)2. ConstructionLowe’s Like MarvinWindowsMarvin WindowsVeneer Mfg. Co.Georgia Pac.Business Plan Options6Tuesday, October 27, 2009Approach 1 to Business Plan Selection7Tuesday, October 27, 2009Approach 2 to Business Plan Selection8Tuesday, October 27, 2009Potential Industries & Customers...Wood Flooring Pallets Residential Construction Commercial ConstructionBridges Wood Utensils Wind PowerFurniture9Tuesday, October 27, 2009The MAJOR Hurdle!Batch10Tuesday, October 27, 2009The DESIRED Solution!Continuous11Tuesday, October 27, 2009Wood Industry Landscape: Revenues and Margins$0$2.00$4.00$6.00$8.00$3.79$5.99$3.29$3.29$3.79$3.99$3.97$1.70$1.80$1.90$1.00$1.80$1.30CherryWalnutMapleRed OakAshBirchPinePrice Point 1Price Point 21. Over 6,000 Lumber Wholesalers in the United States.2. Combined Annual Revenue = $75B.12Tuesday, October 27, 2009QUESTIONS…13Tuesday, October 27,
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