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Assessing the potential impact of a biorefinery product from sawmill residues on the profitability of a hardwood value chain

Hassegawa, Mariana, Gélinas, Nancy, Beaudoin, Daniel, Achim, Alexis
Canadian journal of forest research 2018 v.48 no.8 pp. 857-868
betulin, biorefining, coproducts, forest industries, forest stands, forests, hardwood, income, markets, profitability, profits and margins, raw materials, sales, sawmills, supply chain, value added
Due to the high amount of low-quality hardwoods harvested during selection cuts, the forest industry has been facing a decline in profit margins. One possible solution for utilizing the low-quality raw material is the production of extracts. The objective of this work was to estimate to what extent the inclusion of betulin in the traditional wood products portfolio could extend the profitability of a hardwood value chain. The profitability of a selection cut was assessed from the sawmill perspective, followed by an evaluation of the potential financial gain of producing betulin. Finally, the inclusion of betulin in a value chain was assessed. Results showed that the profitability of selection cuts was very low in some forest stands. The sensitivity analysis demonstrated that, among selected costs and revenues, profit was more sensitive to variations in the value of coproducts. If a fraction of coproducts volume was used to extract betulin, it would be sufficient to generate enough revenue to offset the total costs; however, a major constraint was the small size of the current betulin market, with annual sales not exceeding 1000 kg. Despite that, results demonstrate the potentially strong contribution of high value added extracts to the profitability of the forest value chain.