KLAUSNER TRADING USA, INC.
1. Selling prices;
2. Purchase prices; and
3. Operating capacity and recovery.
When a mill produces a fairly homogeneous standardized product, it only has limited pricing power when customer demands change and prices fall on products with shrinking demand. Producing into inventory exacerbates these pricing weaknesses.
When a mill is able to produce to order without sacrificing efficiency or even gain efficiency from recovery and operating speed, and if this enables the company to have a much larger target audience of customers, then pricing power is enhanced. This is the case for the proposed Klausner Lumber One LLC as the Project (KL 1), a state‐of the‐art Southern Yellow Pine sawmill in Suwannee County, Florida, near the town of Live Oak.
One of Klausner’s competitors is the current low quality/low price leader in the market. However, their strategy is to produce high volumes without regard to quality above construction standards. While other competitors have better reputations in terms of quality, they also command higher prices. The incremental margin is a function of operating hours, log purchases, log classes and operating efficiency.
At this time, most sawmills in the American South are largely tooled for US construction grade lumber and have suffered from the collapse of housing construction and from an inability to tap into alternate domestic or export markets.
Unlike other North American sawmills limited to milling standard imperial lumber dimensions, KL 1 will use computerized production equipment that can produce imperial or metric lumber dimensions hence open up extensive export opportunities. Further, the use of contemporary European sawmill techniques will increase man‐hour productivity about 250% vs. conventional US mills. A US location further facilitates international sales to existing international Klausner clients as lumber generally trades in US Dollars, avoiding the exchange rate risk in selling from European
Euro currency based production.
Non‐lumber products from production will include chips, dust, shavings, and bark and will be marketed within the region to the pulp and paper industry, medium density fiberboard and particle‐board producers, bio‐mass facilities, large agricultural concerns, and other manufacturers.
INTERNATIONAL PRESENCE AND GROWTH PLAN
The Southern US employs tree farms and grows more trees than ever, providing ample supply, the legislative stability and infrastructure to serve as a solid base for world markets.