The Austrian Sawmill Industry - Some Possible Futures

NOT FOR QUOTATION WITHOUT PERMISSION OF THE AUTHOR

THE AUSTRL4N SAWhfJLL INDUSI'RY

-- ^SOME

POSSZBIE FUTURES

Lars Lijnnstedt P e t e r Schwarzbauer

May 1984 WP-04-33

w o ~ k i n g Papers a r e interim reports on work of the International Institute for Applied Systems Analysis and have received only limited review. Views or opinions expressed herein do not necessarily represent those of t h e Institute or of its National Member Organizations.

INTERNATIONAL INSTITUTE FOR APPLIED SYSTEMS ANALYSIS 2361 Laxenburg, Austria

FOREWORD

The objective of the Forest Sector Project a t IIASA is t o study long- t e r m development alternatives for t h e forest sector on a global basis.

The emphasis in the Project is on issues of major relevance t o industrial and governmental policy makers in different regions of t h e world who a r e responsible for forestry policy, forest industrial strategy, and related trade policies.

The key elements of s t r u c t u r a l change in t h e forest industry a r e related to a variety of issues concerning demand, supply, and interna- tional trade of wood products. Such issues include t h e development of t h e global economy and population, new wood products and substitution for wood products, future supply of roundwood and alternative fiber sources, technology development for forestry and industry, pollution regulations, cost competitiveness, tariffs and non-tariff trade barriers, etc. The aim of t h e Project is to analyze t h e consequences of future expectations and assumptions concerning such substantive issues.

The research program of t h e Project includes an aggregated analysis of long-term development of international trade in wood pro- ducts, and thereby analysis of t h e development of wood resources, forest industrial production and demand in different world regions. The other main research activity is a detailed analysis of t h e forest sector in indivi- dual countries. Research on these mutually supporting topics is carried out simultaneously in collaboration between IIASA and the collaborating institution.^ of t h e Project. This article represents parts of the study concerning long-term development of the Austrian forest sector.

Markku Kallio Project Leader

Forest Sector Project

The Austrian forest industry consumed about 14.5 million m3/u.b.

industrial roundwood in 1980 to compare with a total domestic cutting of 13 million m3/u.b. The dominating primary manufacturer is t h e saw- milling industry which in 1980 consumed about 70% of the total indus- trial wood consumption. About 65% of t h e sawnwood production is exported.

In this paper, four scenarios are presented for t h e Austrian saw mills. These scenarios show t h a t future problems such as (i) over- capacity; (ii) insufficient supply of wood raw material and (iii) low profitability

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may arise. These problems could be solved by (1) intensified marketing, (2) intensified domestic cutting, (3) long-term import agreements for wood, a n d (4) a continued modernization of t h e industry.

CONTENTS

INTRODUCTION

1. THE AUSTRIAN FOREST SECTOR 1.1 Production of Forest Products 1.2 Trade with forest products

2. SCENARIOS FOR THE AUSTRIAN SAWMILL INDUSTRY 2.1

A

Reference Scenario

2.2 A Scenario with Decreasing Import of Wood 2.3

A

Scenario with Quick Factor Cost Increase 2.4

A

Scenario with Improved Cash Flow

3. CONCLUSIONS REFERENCES APPENDIX

-

vii

-

THE AUSI'RTAN

S A m

INDUSIXY -- SOME POSSIBLE FUTURES

Lars Lonnstedt and Peter Schwarzbauer

INTRODUCTION

A long-term prototype model of a national forest sector has been developed as a part of IIASA's Forest Sector Project. The prototype model consists of two symmetric competing forest sectors (Lonnstedt, 1983a,b).

Each sector consists of eight modules: Demand of wood products, pro- duct market, forest industry, roundwood market, forest management, inventory of standing volume, construction sector and regulation of t h e forest sector (Figure 1). The model is intended to be used for long-term policy analysis by decision makers concerned about possible future of the forest sector.

A t e a m of researchers a t the Austrian Agricultural University a r e implementing IIASA's forest sector protoytype model; and a t t h e same time, an advisory group has been established to guide the work and t o

Studied c o u n t r y Competing countries

module

Demand module

1

r - - -

-

I I I I 4 1

module

I I I I I 1 I I I I I I I

Kgure 1. Outline of t h e prototype model used on t h e forest sector under investi- gation a n d competing forest sectors. The linkage between the modules consists essentially of price a n d quantity information. From t h e construction sector module new capacity is received. The regulation module specifies quantitative restrictions (marked by dotted lines). As exogenous variables a r e GDP, size of population, prices of substitutes, exchange rates, and prices of input factors oth- e r t h a n wood a n d technological development treated.

)

Construction sector module

help with t h e implementation. A first meeting with t h e r e f e r e n c e g r o u p took place a t IIASA in March 1983 (Appendix).

The purpose of this paper i s t o present t h e r e s u l t s achieved s o f a r in s u c h a way t h a t it will s t i m u l a t e t h e discussion a b o u t t h e direction of t h e work a n d help t h e implementation of f u t u r e results. U p till now, t h e work h a s been c o n c e n t r a t e d on d a t a collection a n d i m p l e m e n t a t i o n of t h e prototype model. The existing version of a n Austrian forest s e c t o r model is a preliminary one where t h e i n t e n t i o n is t h a t t h e Austrian r e s e a r c h t e a m shall c o n t i n u e on i t s own t o elaborate t h e model. Com- pared with t h e prototype model, no competing forest s e c t o r exists which m e a n s t h a t prices a n d export a n d import of wood products a n d round- wood a r e t r e a t e d a s exogenous variables. Also t h e module "Demand of Forest Industrial Products" is n o t y e t existing. I t is r e p l a c e d by exo- genous d a t a t a k e n from f r o m a n Austrian study a b o u t wood d e m a n d a n d supply f r o m 1980 t o 2000 (Oesterreichisches Holzforschungsinstitut, 1901). Many i m p o r t a n t feedback m e c h a n i s m s a r e t h e r e f o r e missing.

Another difference is t h a t t h e s t r u c t u r e of t h e roundwood m a r k e t module is simplified

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s t u m p a g e s h a r e is defined as a l i n e a r function of indus- t r i a l gross margin and h a s been remarkably s t a b l e during t h e l a s t 20 years. No regulation is considered t o take place. I t i s i n t e n d e d t h a t t h r e e industrial b r a n c h e s will be r e p r e s e n t e d in t h e Austrian forest sec- t o r model: saw-milling, pulp industry, a n d wood-based panel industry. At t h e m o m e n t , however, only sawmilling industry is r e p r e s e n t e d in detail in t h i s first version of t h e model. The o t h e r two b r a n c h e s only a p p e a r a s c o n s u m e r s of roundwood; t h e i r consumption also has been t a k e n exo- genously.

As in t h e prototype model, we t r e a t e d forestry and forest industry (in this case sawmills) as two single blocks, despite t h e fact t h a t t h e r e are more t h a n 200.000 forest owners and more than 2000 sawmills in Austria. As far as facts of the Austrian forest sector a r e presented here it m u s t be mentioned t h a t t h e degree of details is kept to a minimum.

Only an understanding of this very first form of t h e model should be reached.

The paper consists of t h r e e sections. In the first, some data about the Austrian forest sector a r e presented. In t h e second chapter, four policy runs with t h e model a r e presented and discussed. The last chapter presents some conclusions based on t h e model runs.

1.

THE

AUSIXIAN RIFEST SECTOR

1.1 Production of Forest Products

Figure 2 gives a n overview of the Austrian production of bulk pro- ducts such a s sawnwood, pulp and wood-based panels. Some conclusions which can be drawn are:

1. The sawnwood production is dominating

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about 65% of t h e total production (in tons) at t h e end of t h e '70s and the beginning of t h e '80s. Compared with t h e middle of t h e '60s, this means a decrease down from about 75%. (Bundesministerium fiir Land- und Forstwirtschaft 1965-1 981).

2. Between the middle of the '60s and the beginning of the '80s, t h e production of a t h r e e bulk products has increased steadily;

sawnwood by 2%, pulp by 3,572 and panels by almost 10% per year (Bundesministerium fiir Land- und Forstwirtschaft 1965-1981).

3. Sawnwood production is r a t h e r large (250%); it is, for example, larger than t h e Italian, but smaller than t h e Swedish (60%).

Pulp production is almost twice as high as in Italy a n d only 15%

of t h e Swedish production. Wood based panels show a different picture. The Austrian production i s 54% of the Italian and 9% of t h e Swedish. Compared t o Hungary as t h e nearest neighbor in t h e East, production figures in Austria a r e 5 times higher for sawnwood, 14 t i m e s for pulp and 4 times for panels (FAO, 1983).

1.2 Trade w i t h forest products

Figure 3 shows how important export is for the Austrian sawmills.

Export measured as a s h a r e of total sawnwood production corresponds t o about 65% (Bundesholzwirtschaftsrat 1980). Main importers of Austrian sawnwood a r e Italy (approximately 60% of Austrian exports); t h e Federal Republic of Germany (approximately 17%); and Middle East countries (approximately 9%) (Bundesholzwirtschaftsrat 1970-1980). Export has increased a little m o r e rapid t h a n domestic consumption of sawnwood.

From Figure 3, we can also see a clear cyclical behavior. In t h e begin- ning of the studied period, t h e fluctuations in export and domestic con- sumption counteracts e a c h other. Import of sawnwood to Austria still accounts for quite a small volume, but has undergone a remarkable increase, almost 18% per year for t h e studied period. P a r t of the import, mainly from Eastern European countries, is re-exported.

Wood Raw Material

Figure 4 presents the wood raw material base for t h e Austrian forest industry. Some conclusions are:

1. Removals a r e less than total increment* (and t h u s standing volume and i n c r e m e n t a r e increasing). The standing volume has increased from 752 million m3 o.b, in 1964 to 825 m 0.b. 3 in 1980.

The

forest area in production has slightly decreased (3.125 million ha 1980) and the total forest area slightly increased (3.780 million ha 1980) (Forstliche Bun- desversuchsanstalt, 1982).

2. Import of roundwood has increased with almost 9% per year compared with just 1% for removals. In t h e middle of t h e '60s, one-twentieth of t h e total Austrian demand of wood was satisfied through import compared with one-fifth in 1980 (Bun- desholzwirtschaftsrat, 1980). Most p a r t of t h e import comes from Eastern European countries, especially from Czechoslo- vakia.

3. Export of roundwood has increased by 3% per year (Bun- desholzwirtschaftsrat, 1980).

4. Roundwood from non-forest land and re-use of wood is quite stable and arn.ounts t o about 2 million m3 (about 15% of t h e total domestic consumption of roundwood). (Bun- desholzwirtschatsrat, 1980).

* To make t h e units, comparable increment has been reduced from solid cubic meters 0.b.

t o solid cubic meters u.b. and reduced by losses (all in all a reduction of 20%).

The total Austrian roundwood consumption defined a s gross felling plus wood from o t h e r sources plus imports m i n u s exports a m o u n t e d in 1980 to about 18.8 million m3 u.b. Compared with 1964, (13.7 million m3 u.b.) this m e a n s an annual average increase of about 2% (Figure 5). The industrial s h a r e is slightly less t h a n 80% a n d increasing (Bun- desholzwirtschaftsrat, 1980).

Income and Costs

The economy and t h e cash flow a r e interesting t o study when i t comes to making a judgement about how prosperous a sector is. In t h e following, we will t r y t o give some data for t h e sawmills (Figure 6). The incomes for sawmills consist of income from sold sawnwood and sold resi- dues. Using domestic prices for sawnwood and adding income for sold residues t h e l a t t e r correspond t o about 7% of t h e total income (Bun- desholzwirtschaftsrat, 1980; Bundesministerium fiir Land- u n d Forstwirtschaft, 1965-1981). One can suspect t h a t this "extra" income is a quite i m p o r t a n t cash flow g e n e r a t o r for t h e sawmills. Cost of logging including transportation t o forest s t r e e t is about 30% of t h e delivery price of sawlogs (Frauendorfer, 1974-1981). The stumpage s h a r e h a s been remarkably stable over time. Multiplying domestic sawlog prices with conversion quotients gives a n e s t i m a t e of t h e wood raw m a t e r i a l cost for t h e sawmill of about 60-70% per sold m3 sawnwood including sold residues. This leaves only about 30-40% for o t h e r costs and profit. If we a s s u m e t h a t gross margin as a s h a r e of total income per sold m sawn- 9

wood corresponds t o 5-15% depending on t h e business cycle t h i s leaves 15-35% for processing costs and costs for o t h e r input factors t h a n wood

(compare with Deringer, 1980 and 1981).

I t is difficult t o get data about t h e cash flow of t h e sawmills. But let us give a n example. If gross profit per sold m3 sawnwood including income from sold residues 1980 was about 300 shilling; i n t e r e s t r a t e s , taxes and dividends could have amounted to less t h a n 100 shilling. To t h e remaining 200 shilling, new loans should be added, repayment of old loans should be subtracted. Usually this means a n e t increase. But if we just multiply o u r 200 shilling with t h e sold volume in 1980, this gives about 1.3 billion shilling for investments inside and outside t h e sector Bodner (1981) estimates almost t h e s a m e figure.

2. SCENARIOS

FDR THE

AUSlXIAN SAmILL INDUSTRY

Some concerns about t h e Austrian forest sector and perhaps espe- cially for t h e export oriented sawmill sector as i t was expressed during t h e reference meeting were: 1) The f u t u r e wood raw material base for t h e industry; 2) Cost competitiveness. The concern for t h e wood raw material base is explained by an increasing industrial capacity based on import. What will happen if t h e r e is a drop in t h e import in t h e future?

Cost competitiveness has among other things t o do with t h e price development compared with t h e factor cost development in Austria rela- tive t o competing countries as Finland a n d Sweden. One way t o tackle those problems could be through financial means. The business is idea t o increase investments in forest industry and forestry. in order t o get m o r e modern equipment and increased productivity. Irivestrnents in sil- vicultural activities will affect t h e f u t u r e domestic wood raw material base.

AS/m 3 ^Sawnwood

t

\

stumpage price

I

logging cost

Processing cost, kost for other input factor transporta- tion cost

de 1 ivery price of sawlogs

Income from sold residue

Domestic price for sawnwood

figure 6. C~lculated income and cost structure for Austrian sawmills (Sources: BHWR, 1980; BMLF, 1965-1981; Deringer, 1980 and 1981).

From t h i s background four different long-term scenarios for t h e Austrian forest sector a r e p r e s e n t e d in t h e t e x t t o follow. The first one is based on exogenous d a t a a n d assumptions t h a t historical t r e n d s will con- t i n u e (exogenous d a t a were t a k e n from Oesterreichisches Holzforschung- sinstitut, 1981). In t h e second scenario sawlog import i s assumed t o decrease dramatically. In t h e t h i r d scenario t h e Austrian factor costs develop m o r e rapid t h a n t h e sawnwood prices. In t h e fourth a n d l a s t scenario t h e financial condition for t h e forest s e c t o r is improved by decreased taxes.

In t h e basic s c e n a r i o domestic consumption and import of sawnwood is expected t o i n c r e a s e u p till t h e e n d of t h i s c e n t u r y with about 0.5% per year. The prospects for t h e export is assumed to be slightly better: 1.4%

per year. However, i m p o r t of sawlogs i s expected to drop with 1.3% per year as a n average. This m a y c a u s e some problems for supplying t h e sawmills with wood raw material. Export of sawlogs is expected to r e m a i n almost u n c h a n g e d (Oesterreichisches Holzforschungsinstitut,

198 1).

We have a s s u m e d t h a t t h e historical t r e n d s will continue for t h e development of prices, factor costs a n d productivity. Prices of sawnwood a n d imported sawlogs a r e i n t h e model a s a n average increasing with 4.2% p e r year. Factor costs a r e a s s u m e d t o be increasing with 0.7% per y e a r a s an average. Productivity a n d efficiency in use of o t h e r i n p u t fac- t o r s ot.her t h a n labor and wood i s a s s u m e d to increase by 4.5% p e r y e a r a s an average. This gives a n inflation r a t e of about 4% p e r year. Con- sumption of wood for pulp, wood-based panels arid fuelwood is a s s u m e d to i n c r e a s e with 0.5% per year.

2.1 A Reference Scenario

Figure 7 shows the historical development until 1980 and from t h e n on a scenario based on t h e model and made assumptions. Two main observations can be made: 1) The model scenario generates a decade with excess supply starting from t h e beginning of the 1980's; 2) Starting from t h e s a m e t i m e , t h e r e is a downward t r e n d for t h e gross margin.

The main explanation for this model scenario with excess supply is assumptions about: a) reduced demand increase for sawnwood from more t h a n 2% per y e a r t o less than 1%; a n d b) delay in adaptation of t h e sawmilling capacity. Preparation, decision and building t i m e for t h e new sawmilling capacity is p u t t o t h r e e years in the model. This m e a n s t h a t a decision taken for increasing capacity when t h e m a r k e t situation looked good may be realized when t h e situation has changed. The life time of t h e sawmilling capacity is p u t t o 20 years in t h e model.

The utilization of t h e sawmilling capacity is i n reality r a t h e r flexi- ble. I t is easier t h a n for t h e pulp and paper industry t o change t h e utili- zation of t h e capacity through varying t h e working hours per day. Small sawmills can also, i f they a r e connected to a farm o r some o t h e r opera- tion be p u t aside or brought i n t o use when t h e m a r k e t is good. The model capacity should be looked at a s potential capacity. The a c t u a l pro- duction is therefore m u c h closer t o a c t u a l demand.

One reason for t h e decreasing gross margin in t h e model is t h e increasing export s h a r e of total production. Domestic a n d export prices a r e a s s u m e d to be t h e s a m e in t h e model. However, t h e transportation and i n s u r a n c e costs a r e in t h e model higher for export sale t h a n for domestic sale. Another reason is t h a t decreased investment means a

c a p a c i t y (m 3 )

"Ti

^*

2 . g r o s s f e l l i n g s ( m 3 u.b'.

' I

I

.k

Import sawlogs (m 3 )

j !

0.-

is..

^{i .}

.

1

.

^{. . . I ,939. .}

im.

^{1 . tsr. . I in. . -}

Figure 7 . A reference scenario for the Austrian forest sector.

slower introduction of new capacity which will affect processing cost per m sawnwood. However, t h i s effect will be marginal because of t h e small S

s h a r e for processing cost compared with costs for i n p u t factors s u c h as sawlogs.

2.2 A Scenario w i t h Decreasing Import of Wood

The assumptions for this scenario is t h e s a m e as for t h e r e f e r e n c e scenario except f o r a substantial decrease i n i m p o r t of sawlogs after 1984. In this s c e n a r i o t h e situation with excess supply will be followed by a situation with e x c e s s d e m a n d d u e t o t h e lack of wood raw m a t e r i a l (Fig- u r e 8). The sawmills will in t h i s case have t o decrease t h e i r capacity down to a level t h a t fits t h e domestic gross felling volume. This will

1°-1

9*+J

c a p a c i t y (m 3 )

F i e 8. A scenario with substantial decrease of sawlogs.

especially affect r u r a l communities because of t h e local importance of the sawmill sector. Export markets for sawnwood m u s t be given u p or the import of sawnwood increased.

2.3 A Scenario with Quick Factor Cost Increase

In t h e reference scenario, t h e total variable cost for producing one cubic m e t e r sawriwood increased with about t h e same r a t e as t h e pro- duct price. The assumption in this scenario is t h a t t h e factor costs after 1984 increases with about 9.7% per year instead of about 8.7% a s in t h e reference scenario. The price is as in t h e reference scenario. Of course, t h e result will be a declining t r e n d for the profit. As c a n be seen from Figure 9, this is exactly what happens in the model. The decrease in

sawmilling capacity in t h e model h a s t h i s t i m e economical reasons a n d is n o t caused by t h e availability of wood raw m a t e r i a l . (We a s s u m e t h e s a m e i m p o r t development for sawlogs as in t h e r e f e r e n c e scenario.) I t is n o t profitable t o invest in new sawmilling capacity c o m p a r e d with o t h e r i n v e s t m e n t alternatives. New sawmilling technology will be i n t r o d u c e d a t a slower r a t e in Austria t h a n in o t h e r countries. As pointed o u t earlier,

t h i s negative development will partly be reinforced t h r o u g h t h e negative i m p a c t of t h e few o r lacking i n v e s t m e n t s will have on t h e productivity development a n d t h u s also on t h e development of t h e processing cost.

Another negative influence, also already mentioned, is increasing unem- ployment in r u r a l communities.

2. sawlog c u t t i n g s

1

.+

Import of sawlogs

8 . j .

.

^,

is.. i . . I%.

^{9 .}

In.

^\m.

In:

Figure 9. A s c e n a r i o w i t h "quick" factor cost development.

2.4 A Scenario with Improved Cash Flow

In this s c e n a r i o , m o r e money is available for i n v e s t m e n t s in new sawmilling capacity a n d for f o r e s t r y activities. This is achieved by decreased taxes. In t h e model, t h e r e s u l t of a n increase of t h e c a s h flow is i n c r e a s e d i n v e s t m e n t s a n d sawmilling capacity. Compared with t h e r e f e r e n c e s c e n a r i o t h e period of excess supply will be prolonged a n d t h e r e f o r e t h e situation is even worse As Figure 10 shows, a slight improvement in t h e gross profit level is possible t o t r a c e t h r o u g h a rapid installation of new equipment. The capacity c a n n o t be i n c r e a s e d without a n i n c r e a s e a t t h e m a r k e t side a n d i n c r e a s e d wood raw m a t e r i a l supply a t t h e s a m e time. The effect of i n c r e a s e d silvicultural activities, which in t h e model follows d u e t o i n c r e a s e d c a s h for forest m a n a g e m e n t , is not s e e n because it will t a k e g e n e r a t i o n s before t h i s materialize i n i n c r e a s e d i n c r e m e n t a n d cuttings.

c a p a c i t y

/---

1

.+j

Import of sawlogs

Figure 10. A scenario w i t h improved c a s h flow,

3. CONCLUSIONS

More or l e s s all t h e model r u n s identify t h e following problems for t h e Austrian sawmills:

1) excess supply 2) s h o r t a g e of wood

3) u n c e r t a i n t y about t h e development of t h e profit level

What will actually happen, no one c a n predict. The model c a n just gen- e r a t e difierent scenarios -- scenarios t h a t a r e t h e logical consequence of t h e model s t r u c t u r e a n d m a d e assumptions.

One r e a s o n for t h e "overshoot" of sawmilling capacity in t h e model during t h e 1980's is t h e assumption about a slower i n c r e a s e of s a ~ m w o o d consumption t h a n t h e historical one. The effect of this c a n be c o u n t e r - balanced t h r o u g h a m o r e i n t e n s e m a r k e t i n g with t h e i n t e n t i o n of increasing t h e m a r k e t s h a r e s . This policy c a n be followed by t h e whole s e c t o r or by individual companies. Austria is well located for c e n t r a l , e a s t e r n a n d western European m a r k e t s compared with, for example, Fin- land a n d Sweden. It is e a s i e r for t h e Austrian sawmills t o keep in t o u c h with i t s c u s t o m e r s a n d adopt i t s products.

This marketing s t r a t e g y is offensive a n d it a s s u m e s t h a t t h e sawm- ills can be supplied with sawlogs. More wood could

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f r o m a physical point of view

--

be m a d e available t h r o u g h i n c r e a s e d domestic c u t t i n g s ,

which i s possible if we look a t t h e i n c r e m e n t , a n d import of sawlogs. The cutting behavior of t h e forest owners can be affected by economic m e a n s for example t h r o u g h a combination of c h a r g e s a n d rewards. The u n c e r - tainty about t h e f u t u r e development of sawlog i m p o r t s i s m o r e difficult t o m a s t e r . One possibility i s long-term a g r e e m e n t s or joint ventures. In a long-term perspective, i t i s possible t o i n c r e a s e t h e production of t h e Austrian forest a r e a . Different silvicultural activities could be subsi- dized o r s t i m u l a t e d t h r o u g h favorable loans.

In t h e long r u n , however, i t is n e c e s s a r y for t h e Austrian forest sec- tor t o b e competitive. The scenarios have shown how sensitive t h e sawm- ills a r e o n t h i s point. The f a c t o r cost development is o u t of t h e hands of t h e sawmills. Arguments t h a t could be u s e d by m a n a g e r s for getting a governmental u n d e r s t a n d i n g for t h e necessity of achieving a cost development which fits into t h e price development of sawnwood a r e con- tributions of t h e sector t o balance of p a y m e n t , t o employment opportun- ities a n d t o t h e r u r a l development. An offensive s t r a t e g y for t h e sawmills t o c o n t i n u e i s t o k e e p i t s modernness a n d always be on t h e edge of efficiency s i n c e t h i s will also affect variable cost per cubic m e t e r sawn- wood. This h a s usually gone hand-in-hand with centralization because of economies of scale. The conflict with r u r a l i n t e r e s t s is obvious. Another drawback is d e c r e a s e d flexibility when it c o m e s t o capacity utilization.

The g o v e r n m e n t has of c o u r s e several economic a n d financial m e a s u r e s t o s t i m u l a t e (or h a m p e r ) private initiative for modernization if this is found to be necessary. The l a s t scenario, however, shows t h a t one m u s t be c a r e f u l n o t t o choose too g e n e r a l m e a s u r e s .

Bodner, J. (1981) Strukturveranderungen in der ijsterreichischen Siigeindustrie

--

die Rolle d e r zwischen

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bzw. iiberbetrieblichen Kooperation z u r Sicherung d e r Wettbewerbsfahigkeit der oster- reischen Sageindustrie. Vienna, Austria: Universitat fiir Bodenkul- tur.

Bundesholzwirtschaftsrat (BHWR) (1970-1980) Statistik d e r oster- reichischen Holzausfuhr 1970-1980; Jahreshefte. Vienna, Austria.

Bundesholzwirtschaftsrat (BHWR) (1980) Holzbilanzstudie 1926-1978(79);

Holzkurier 48. Vienna, Austria.

Bundesministerium fGr Land- und Forstwirtschaft (BMLF) 1965-1981:

Jahresberichte iiber die Forstwirtschaft 1964-1980. Vienna, Austria.

Deringer, P. (1980) Retriebsvergleich 1979 aus d e r SZgeindustrie;

Holzkurier 47. Vienna, Austria.

Deringer, P. (1981) Einmal Gewinn s e c h s diirren Jahren; Holzkurier 47.

Vienna, Austria.

FAO. 1983. Yearbook of forest products 1970-1981. Rome, Italy.

Forstliche B u n d e s v e ~ ~ s u c h a n s t d t (FBVA) 1982. Die osterreichischen Forstinventur 1971/80. Vienna, Austria.

Frauendorfer, R. 1971-1981. Ertragsberichte der Forstwirtschaft 1970- 1980. Unpublished papers of the Institute of Forest Economics a n d Forest Politics. Vienna, Austria: Universitat fur Bodenkultur.

Lonnstedt, L. 1983a. A Forest Sector Prototype Model

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The Simplified Model S t r u c t u r e . WP-83-68. Laxenburg, Austria: International Insti- t u t e for Applied Systems Analysis.

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Oesterreichisches Holzforschungsinstitut. 1981. Holz in Oesterreich 1980 bis 2000. H o l z k u r i e r 39. Vienna, Austria.

The foll.owing a r e m e m b e r s of t h e advisory group present a t t h e first meeting a t IIASA:

Kommerzialrat Dip1 .-lng. Wolfgang TEISCHINGER (sawmilling Industry)

Komrnerzialrat Dr. Gottfried STEPSKI-DOLIWA (pulp a n d paper industry)

Baurat h.c. Dip1.-Ing. Dr. Eduard WALLNER (Wood-processing industry)

Dr. Leopold GOESS (Forestry)

Dr. Karl SEDELMAIER (Secretary of t h e Austrian Council of Forest Industries)

The Austrian project group consists of P e t e r Gliick

Hans Jobs tle

P e t e r Schwarzbauer Hubert Sterba

They a r e all from t h e Agricultural University of Vienna (Universitat fiir Bodenkultur).