Creating customer value at Rocky Mountain Fiberboard.

Lawrence, John J. ; Haines, Doug ; O'Neill, Michele 等

CASE DESCRIPTION

The primary subject matter of this case concerns strategic planning, strategy formulation, and the alignment of functional strategies with the overall business strategy. Secondary issues examined include the incorporation of societal & environmental needs into business decisions, the strategic issues associated with staying focused, and bankruptcy. The case has a difficulty level of five. It is best suited for use in graduate level or advanced undergraduate courses given the scope of the difficulties the company faces and the complexity of the situation described. It is ideally suited for use in a capstone strategic management class because it requires the student to deal with strategic marketing, production and financial issues in an integrated manner. The case could also be used in a capstone marketing course, a small business management course, or in an entrepreneurship course. The case has been designed to be taught in 75 to 90 minutes and is expected to require four to five hours of outside preparation given the detailed financial analysis that can be done.

CASE SYNOPSIS

Rocky Mountain Fiberboard (RMF) produced particleboard out of bluegrass straw. It was established in 1999 as a joint venture between a processor of bluegrass seed and a Northwest American Indian Tribe. RMF was created to help solve the problem of waste bluegrass straw and was also part of the Tribe's effort to diversify the economic base of its reservation. RMF, however, experienced significant difficulties. It had lost $1.9 million in 2001, had $4.5 million in debt, and had no real working capital. Its Tribal owners were putting $42,000/month into the company to keep it going. While a pending grant application with the U.S. Department of Agriculture offered hope of reducing its significant debt burden, the business was also experiencing difficulties attracting and retaining customers and was experiencing significant quality problems. Luke Waterman, a trusted Tribal member who was in the process of completing a business degree at a nearby university, had recently taken over as general manager and was faced with the task of overcoming the considerable financial, marketing, and production problems the business faced. Luke was considering three options: (i) identifying additional funds to undertake a focused marketing effort and to implement process improvements in production; (ii) acquiring equipment and licenses to produce another product--wall panels--that would use RMF's strawboard; or (iii) declaring bankruptcy.

INTRODUCTION

Luke Waterman stared at Rocky Mountain Fiberboard's (RMF) 2001 financials. The company had lost $1.9 million on sales of $1.7 million last year. It had over $4.5 million in debt, payables of over $800,000, and starting early this year required $42,000/month from its owners just to stay in business. RMF was experiencing significant difficulties.

The financials might hold the key to understanding what to do next, Luke thought, but he was distracted today. From the window of his office, Luke could see twenty wall panels that had just been unloaded into the plant. The wall panels came from Quickstart Building System's plant in southern Idaho where Luke and Frank Lewis, the president of RMF's board of directors, had just visited. They were considering partnering with Quickstart and had visited to learn more about the firm's product. Quickstart's wall panels were pre-fabricated walls made primarily from oriented strand board (OSB) and were used to speed up on-site construction of homes. The company had a market among developers that built many similar homes in the same development. Quickstart's owner was looking for a business interested in either producing wall panels under some type of license agreement or becoming a partner of the wall panel business. While there were a few challenges to overcome, Luke believed RMF's strawboard could replace OSB in the interior of the wall panels, thereby creating demand for strawboard.

Sitting in his office Luke wondered whether the wall panels represented the opportunity that could save RMF or were just another distraction for the company that already had too many things that needed to be done. Looking into the plant, Luke could see past the wall panels that had just been unloaded to where the production equipment sat idle for lack of orders. Production, when running, was plagued with a number of quality problems that resulted in as much as 20% of production on some days having to be downgraded. RMF had a large inventory of these second-quality, or shop grade, boards. The company had a hard enough time finding customers for its first quality boards, let alone for these shop grade boards.

Luke was frustrated and more than a little nervous. He had been associated with RMF for just a year, and he had come into the organization as simply a marketing intern and part-time undergraduate business student at a nearby university. Recently he had been asked to take over the general manager position at RMF, and he wanted to find a way to turn the company around and save the jobs that the plant created--jobs that were needed in the local community. Luke was a member of the American Indian Tribe that co-owned RMF, and it was his position as a trusted member of the Tribal community, combined with his business education and experience with the organization, that had led to his being asked to assume the general manager position. While Luke was a little older than the typical undergraduate student and had some previous work experience, he was still in the process of finishing up his senior year of university coursework and felt somewhat overwhelmed by the task he now faced. "What have I gotten myself into," Luke thought to himself. "Last year I was a full time student with a marketing internship at RMF, and this year I am the general manager of a business that's in crisis."

COMPANY BACKGROUND

Rocky Mountain Fiberboard was established in March of 1999 as a joint venture between Bluegrass Growers, Inc. (BGI) and a Northwest American Indian Tribe. BGI processed and marketed bluegrass seed for inland northwest producers and was owned and managed by a group of bluegrass farming families in eastern Washington. The American Indian Tribe was a sovereign Indian Nation located on its own reservation in northern Idaho.

RMF was established in an effort to find at least a partial solution to the dilemma of coping with the waste straw from the harvest of bluegrass seed in eastern Washington and northern Idaho. Until recently, the bluegrass straw left over after the seed harvest was burned in the field. Burning was not only an efficient way to deal with the straw residue, but it also promoted high bluegrass yields in subsequent years and helped prevent disease and pest problems from developing.

The burning, however, created significant air quality problems during late summer and early fall. Citizen groups protested the burning on the basis of health and quality of life arguments. People with respiratory problems and elderly people were impacted the most, and during heavy burning public health officials recommended that such people remain indoors. Meanwhile, bluegrass farmers argued that field burning was critical to their being able to grow bluegrass seed profitably. Not surprisingly, this became a very emotional issue for many people in the region and polarized some communities.

In 1996 in the face of pressure from various citizen groups, the state of Washington banned field burning. Bluegrass farmers resorted to cutting and baling the bluegrass straw to remove it. Thus, along with reduced yields and higher incidences of pest and disease, bluegrass seed farmers were now incurring baling costs of approximately $25 per ton. Further, farmers were faced with figuring out how to use or dispose of this residual straw.

To cope with the disposal issue, BGI hired an agronomist, Adam Davis, to help them devise a plan to use the growing piles of baled straw and to try to recover the cost of baling the straw each year. It was Adam's idea to create a business to use the straw to produce strawboard. Adam's plan was to then market the strawboard as an environmentally friendly, or "green", alternative to traditional wood-based particleboard. An informal business plan was quickly developed. The preliminary research conducted for it reported that strawboard plants in North Dakota and Kansas had sold out of all their production since they started up and that there were no strawboard plants in the Pacific Northwest region. These facts led Adam to believe that a strawboard plant in the Pacific Northwest would have to compete primarily against wood based particleboard. It was felt that a small strawboard plant could compete successfully against wood based particleboard producers, even though they were larger, because of strawboard's superior product characteristics (see the next session for a discussion of these characteristics) and because a small plant would be more flexible, able to produce smaller runs of specialty items that could be sold at higher prices. Adam also felt that if run efficiently, a small strawboard plant could have lower production costs than the much larger wood particleboard competitors, particularly if good-quality used equipment could be located.

After some searching Adam eventually found a Canadian broker who knew of two used strawboard production lines available from a company in Australia that was getting out of the strawboard business. Having found the equipment and without conducting further market research, Adam then approached a neighboring American Indian Tribe to see if they would be interested in becoming a partner in the venture. The Tribe operated a very successful casino operation on its reservation but was also known to be interested in further economic development that would lead to greater diversification of the reservation's economy. The Tribe had designated 25% of its casino profits be put into such economic development efforts.

After listening to Adam's presentation on strawboard production, the Tribe agreed to partner with BGI to create Rocky Mountain Fiber. The initial agreement gave 50% of the ownership to the Tribe and 50% to BGI. Another agreement allowed the percentage ownership, which was based on the notion of "sharing units", to vary according to the level of resources each organization put into the venture over time. A board of directors consisting of five members was established to oversee the operation of RMF. Three of the directors were from BGI while the remaining two were from the Tribe. Frank Lewis, of BGI, was named the president of the board. Adam Davis was appointed to be general manager of RMF. The new entity's mission statement read:

Rocky Mountain Fiberboard is a joint venture created for the purpose of fabricating particleboard from bluegrass, wheat and other grain straw residue from Eastern Washington and Northern Idaho. Rocky Mountain Fiberboard was established in March of 1999 in an effort to find a solution to the unused straw residue.

RMF signed a 20-year lease agreement with the Tribe to use a Tribe-owned warehouse in Idaho as RMF's manufacturing facility. In order to acquire the necessary equipment, primarily the two used production lines from Australia, RMF borrowed $4.5 million from Northwest Farm Credit Service in the form of a 10-year note payable. The loan was collateralized by a first lien position on the leasehold interest in real property and a first security interest in all equipment and machinery. In addition, the U.S. Department of Agriculture (USDA) guaranteed $3.5 million of the loan while BGI and the Tribe guaranteed the remaining $1 million at $500,000 each.

The production equipment was dismantled in Australia, containerized, and shipped to Idaho for reassembly. Rich Stanley, a former production supervisor with the Australian company from which the equipment was purchased, went to Idaho to help set up the equipment and train RMF employees on its use and maintenance. Adam Davis soon recognized that Rich's knowledge and experience with the equipment would be extremely valuable to RMF. In order to entice Rich to stay on with RMF, Adam offered Rich the position of production manager despite Rich's limited managerial experience and training. Rich accepted, and with Rich's help, the equipment was set up, and in July of 1999 RMF produced its first unit of strawboard.

RMF STRAWBOARD

Strawboard was produced from two ingredients: straw (composing approximately 96% by weight in RMF's panels) and Methylene Diphenyl Diisocyanate (MDI) resin (the remaining 4% in the panels). It had functional characteristics similar to and competed with traditional wood particleboard. Compared to wood particleboard, strawboard had several favorable characteristics. Bluegrass straw produced fibers that were longer than the wood fibers in traditional particleboard. When the MDI resin chemically bonded the straw fibers together, it gave bluegrass strawboard more stability and strength than wood particleboard, which had shorter fibers and used a urea-formaldehyde resin that simply provided the wood fibers a place on which to sit, as opposed to chemically bonding them. In addition, the bluegrass fibers possessed a natural resin, which when combined with the MDI resin provided superior moisture resistance. As a result, bluegrass strawboard absorbed less moisture and expanded much less than wood-based particleboard.

In addition to being a substitute for wood particleboard, another characteristic of strawboard was that it could be considered "green," and that appealed to certain consumer segments. An important selling point for strawboard then, was that it was "tree-free" and eliminated the need to cut down trees to produce it. Also, using bluegrass straw to produce the board eliminated the need to burn leftover straw, reducing air pollution. Lastly, the resin used specifically in strawboard, MDI, did not release fumes once it was formed into the board, while the urea-formaldehyde resin used in wood particleboard did. One other way in which strawboard was green, literally, was through its initial color and odor. The product itself had a slight green tinge and an odor similar to that of a freshly mowed lawn, only not as strong. Both the color and the odor became insignificant several weeks after the board was produced. Luke recalled that early on some freshly produced panels had been provided to prospective customers and that, unfortunately, they had reacted negatively to the initial smell.

Strawboard could be used in almost any application that used wood particleboard, including underlayment, shelving, home and office furniture, countertops, and cabinets. Indeed, in many such applications a laminate was placed on the strawboard or particleboard so that the final customer did not even see the actual board, e.g., countertops. Retail customers could use strawboard for home improvement projects or other home uses that might otherwise be met with wood particleboard. It could even be used in some home construction applications.

THE PRODUCTION PROCESS

In general, the process of producing strawboard required straw to be cut, combined with resin, deposited on a metal plate, and then cured using a combination of heat and pressure. Production started with the straw. According to terms of the joint venture agreement, BGI provided straw to RMF in exchange for sharing units. The sharing units represented an equity investment in the joint venture by BGI. BGI expected to at least cover the cost of baling the straw and valued the straw at $25/ton when RMF opened in 1999. However, because RMF was unable to produce income for the partners and since no long-term pricing contracts were in place, by 2001 BGI was valuing the straw at $40-$42/ton. By this time, BGI realized that charging a higher selling price to a company that could not pay cash and instead 'paid' by allocating sharing units only resulted in BGI gaining additional ownership in a money-losing operation. BGI stopped providing straw in spring of 2002. RMF then began purchasing straw for a comparable price from Oregon Hay Products, Inc. located in northeastern Oregon. RMF never attempted to acquire straw from other sources or through a competitive bidding process.

In order for the straw to be used in the production process, it needed to be dry and free from deterioration, such as mildew. Because bluegrass seed was harvested and the leftover straw baled only once a year in the late summer, the storage conditions largely determined how much deterioration occurred. Most farmers stored straw bales in large piles under tarps. RMF acquired straw throughout the year in 4' x 4' x 8' bales and stored them outside of its facility under tarps, too. RMF's inspection assured the quality of incoming bales, but outside storage at its facility led to significant straw deterioration, and RMF had to dispose of approximately 15% of the straw it purchased. Furthermore, outdoor storage contributed to greater variability in moisture content of the straw, which made it more difficult to achieve consistent, high quality boards in production. RMF had plans for a straw storage facility that would help overcome these problems but did not currently have the capital to build such a facility.

The actual processing of the straw began by loading a bale onto a machine that broke up the bale. The straw then traveled along a conveyor specially built to remove contaminants. Next, it was gravity-fed into a hammer mill and cut to the required length. From the hammer mill, the straw was blown through a ductwork system to a "cut straw" storage bin. This first part of the production process was performed outside of RMF's building. A diagram of the production process is shown in Exhibit 1.

From this outside storage bin, augers were used to bring the cut straw inside where RMF had two separate, identical production lines. The production lines were among the first built by the equipment manufacturer that made them and were smaller, less flexible, and less automated than current models. The two lines combined had the capacity to produce approximately 12 million square feet of 3/4" strawboard annually when operating 24 hours a day, 7 days a week (the capacity increased with decreasing board thickness such that the combined capacity for 1/4" strawboard was approximately 38 million square feet).

The incoming cut straw went first into a bulk hopper. From this bulk hopper a 200-pound batch of straw was fed into a chamber, called a resinator, where it was mixed with resin. From the resinator the mixture traveled up an inclined belt that dropped it onto a "cold plate". A cold plate was simply a polished piece of metal upon which the straw/resin mixture would be pressed into a board. Increasing or decreasing the speed of the track on which the cold plates traveled controlled the amount of straw/resin mixture deposited. An operator checked the weight of each board to insure that the correct amount of straw/resin mixture had been deposited and adjusted the track speed if either too much or too little had been deposited.

After the straw/resin mixture was deposited on the cold plate, the plate went into a 10-ton pneumatic pre-press where initial compaction of the material occurred. From the pre-press the boards were moved to the main, 100-ton hydraulic press. The time in the main press was a function of the board thickness and ranged from 3.5 minutes for 1/4" boards to 8.5 minutes for the 3/4" boards. From the main press the boards traveled along a track to a station where an operator removed each board from its cold plate and pushed it into an edging saw that trimmed the board to its required 4' x 8' size. The firm also had the capability to cut the 4' x 8' sheets into smaller sizes as desired by customers, although this was rarely requested. After edging, the completed board was again weighed and, if acceptable, went to cooling racks. However, if a board was too light or too heavy the inspector marked the board as such and signaled to the operator in the central control booth. In response, the operator might adjust the speed of the track on which the cold plates were loaded.

Once the boards had cooled they were inspected again for quality. Two problems were typically uncovered at this point. One, the surfaces of some of the boards had imperfections. Typically these were attributed to imperfections in either the main platens in the 100-ton main press (top-side imperfections) or the cold plates (bottom-side imperfections). Both the press platens and the cold plates needed replacing. Ideally, press platens needed to be replaced once every 5-7 years, while the cold plates needed replacing about once every 2 years. RMF had put off replacing this equipment in order to conserve capital. New press platens would cost about $50,000/line and a new set of cold plates would cost $30,000. The other typical problem was that the edges of some of the boards had imperfections. This occurred because the boards were trimmed to size before they had cooled completely, which resulted in a rough cut. While the boards would ideally be allowed to cool before they were trimmed, the cooling racks were sized for trimmed, rather than untrimmed boards. These boards with significant surface irregularities or edge damage were either downgraded to be sold at a discount or designated as salvage boards and set aside to be re-ground into new boards.

The final step in the process was sanding. Un-sanded boards were extremely smooth--too smooth to create a good bond with the various glues that furniture manufacturers used to attach laminate--so sanding was performed to create a rougher surface. The sanding process took off about a millimeter of material from both the top and bottom of the board, so boards that were to be sanded were made slightly thicker to meet width specifications once sanded. While not all customers required their boards to be sanded, currently a few customers did. After the boards were sanded there was a final, visual quality inspection. While the sander could eliminate some minor imperfections caused by the aging press platens and cold plates, the sander, because of its age and limited capability, was equally likely to create surface imperfections in the boards. Boards that came out of the sander with surface irregularities had to be downgraded.

Approximately 10% of all boards produced had to be downgraded or designated as salvage at some point in the process. Downgraded boards were structurally sound but had soft spots, surface irregularities, or nicks on the edges, while salvage boards contained defects that affected the board's structural integrity. Total downgrade and salvage rates varied greatly on a day-to-day basis. Only 2% of the boards were downgraded on good days, but on bad days, 20% or more of the production was downgraded. Generally the quality problems were greatest with the 3/4" boards. From a quality standpoint, RMF had been fortunate in 2001--about 80% of its sales were 1/4" boards and only about 15% of its sales were of the more problematic 3/4" boards.

Compounding the quality problems in production was the disposition of the downgraded and salvage boards. Finding customers for downgraded boards had proved challenging because most customers willing to purchase downgraded boards were extremely price sensitive, and as such, were more likely to purchase downgraded wood particleboard, which was cheaper than downgraded strawboard. Because of this, almost 55% of the inventory RMF held was in downgraded boards. Salvage boards, in contrast, were set aside to be re-ground to make new boards. RMF, however, did not own the necessary grinding equipment to do this. As a result, one end of RMF's facility was full of salvage boards that had been accumulating since the business opened in 1999, waiting possible re-grinding at some future time.

THE SITUATION IN FEBRUARY

Circumstances by February had reached a state of crisis. Pricing issues had continually frustrated RMF during its three years in business. The original informal business plan that Adam Davis assembled had a sales strategy that called for pricing initially at a discount compared to wood-based competitors to attract customers and then increasing the price over time based on strawboard's superior quality and environmental benefits. However, market prices for particleboard peaked about the time RMF opened for business and then dropped, from $275 in January of 2000 to $235 in January of 2002. RMF attributed the decline in prices generally to the slowing economy during these three years and an apparent oversupply of particleboard. Falling prices for particleboard and other wood-based alternatives to strawboard made it very difficult for RMF to increase its price much over time.

Sales had also declined steadily over the last year, from 1.5 million square feet per month in the first quarter of 2001 to less than 200,000 square feet per month currently. Only a single customer remained who could be considered a steady customer--a distributor in the Seattle area who regularly bought 3/4" boards. RMF was grateful to have this customer. To encourage the customer to remain with it, RMF absorbed the shipping costs for this customer. Previously, all prices were quoted FOB-Factory so that freight costs and thus, final sales figures differed by customer.

As a result of the steep decline in sales, RMF had laid off the majority of its employees. From a high of 30 employees in the summer of 2001, only six remained on payroll and had fixed annual salaries. In addition to Luke, the company currently employed an office manager, a production manager, two production team leaders, and a quality control inspector. These few employees performed all work necessary to supply the remaining customer in Seattle and handle what few orders came through from elsewhere. Susie Nelson was the office manager. Susie handled a variety of tasks, including accounting and human resource management functions and providing secretarial support. Rich Stanley, the former production supervisor from Australia, was the production manager. Rich, working with the two remaining team leaders and quality control inspector, operated the production equipment when there were orders and worked to refurbish the production equipment (to the extent possible without investing significant capital) when there were not. The marketing manager's position was currently open. The most recent marketing manager had been fired several months ago because he had taken little action to pursue and follow-up with potential customers. RMF had had several people in this position since the business opened, but none seemed effective. RMF had primarily recruited people from the wood particleboard industry, and Luke found these individuals had difficulty shifting away from the "price is everything" marketing approach used in the commodity-based particleboard industry. Luke and Susie were picking up the marketing responsibilities where they could.

Compounding RMF's marketing and operations problems was the financial situation, which had become extremely tenuous. The company's 2001 Balance Sheet, Income Statement, and Statement of Cost of Goods Manufactured are shown in Exhibits 2-4. By this time, the company reported an annual net loss of almost $2 million and the owners had incurred equity losses of just over $600,000. In addition, RMF had long-term debt of $4.6 million, of which $950,000 was due in 2002. Given the poor financial conditions of the firm and in an attempt to head-off possible bankruptcy, RMF had approached its principle lender, Farm Credit Services, at the end of 2001 to work out a debt-relief schedule. As part of that plan, RMF had applied through Farm Credit Services to the USDA to have the $3.5 million portion of the loan that the USDA backed converted into a grant. The grant conversion program was designed to help troubled businesses that had obtained these USDA-backed loans reduce their debt and increase their chance of survival. As such, the grant conversion process came with some expectation that the business would continue to operate as a going concern. The USDA, working with Farm Credit Services, was expected to make a decision on RMF's grant application by late March or early April. Based on conversations with Farm Credit Services employees, Luke expected that at least $3 million of the loan would be converted into a grant, significantly improving RMF's debt situation.

From Luke's perspective, RMF appeared to have three options. Option 1 was to try to turn around the business while remaining focused purely on strawboard. To do this, Luke knew the company would need to find new customers. Option 2 was to team up with the firm Luke and Frank had just visited, Quickstart Building Systems, to produce wall panels comprised of OSB and strawboard. This would allow RMF to further differentiate its product from traditional particleboard. Option 3 was to simply shut the business down and perhaps declare bankruptcy.

To better analyze each of these options, Luke knew he needed to learn more about the strawboard industry generally, and RMF's competitors particularly, to better understand the competitive potential for RMF's product. Similarly, Luke thought it would be helpful to know more about the particleboard industry since RMF was trying to sell a substitute for traditional particleboard. Luke also felt that he needed to have more information about the marketplace opportunities for strawboard. After doing this research, Luke hoped that he would understand why RMF's original business strategy was not working and the firm was in such trouble now. The firm had had a business plan early on, a ready supplier for one of its raw materials, and a product that appeared to be in high demand. Luke wondered where RMF had gotten off track from its goal of being a successful producer of strawboard.

INDUSTRY RESEARCH AND EVALUATION

Luke identified three other companies in North America that produced strawboard: PrimeBoard, Inc. in Wahpeton, North Dakota; Prairie Forest Products, in Hutchinson, Kansas; and Isobord Enterprises in Elie, Manitoba, Canada. All three of these competitors were significantly larger than RMF and produced particleboard primarily out of wheat straw, which had properties similar to bluegrass straw. All three also promoted the "green" characteristics of their strawboard in addition to its superior qualities relative to particleboard.

PrimeBoard was the oldest manufacturer of strawboard in North America. The privately-held company began operations in 1995. PrimeBoard's plant employed 70 people and produced approximately 30 million square feet of strawboard in 2001. The plant could produce boards from 3/8" to 1-1/4" and had sufficient capacity to produce as much as 60 million square feet of 3/4" strawboard per year. That was five times RMF's capacity of approximately 12 million square feet of 3/4" strawboard per year.

Prairie Forest Products, another privately held company, had opened its strawboard plant in 1997. It operated 24 hours a day, 7 days a week, and produced approximately 20 million square feet of strawboard in 2001. The company focused mainly on producing 7/16" and 5/8" boards. The firm was in the process of installing a second production line that would effectively double its capacity. Isobord Enterprises was perhaps the most significant threat to RMF among the strawboard producers because the chemical company giant, Dow Chemical, had recently acquired it. Isobord began production in 1998 with a $100 million plant that had the capacity to produce 144 million square feet of 3/4" strawboard per year. The plant produced boards that ranged in thickness from 1/2" to 3/4". Isobord products were sold through conventional wood particleboard distribution channels, as well as directly to some large manufacturers. Still, the company ran into financial trouble and declared bankruptcy in February of 2001. Dow acquired the company out of bankruptcy in May of 2001. At the time of the acquisition, Brad Money, the Dow executive charged with running the business, was quoted as saying, "We have always believed in the product, and we continue to believe that it has the potential for strong commercial appeal with consumers and contractors"(McCoy, 2001). At the same time, a Home Depot spokesperson predicted that the acquisition would be "a strong factor in bringing environmentally conserving wood replacement panels more into the mainstream with consumers" (McCoy, 2001).

Even though Luke found only three other strawboard producers, RMF's competition consisted of traditional wood particleboard producers, too, since RMF was trying to replace their product. Indeed, Luke was more hopeful about prospects when he found that particleboard accounted for as much as 18% of the total wood- and agrifiber-based products produced in the U.S. (Sellers, 2001). Luke identified the leaders of the wood industry that produced particleboard among other wood products. Two of the top U.S. producers of particleboard were Georgia-Pacific and Louisiana-Pacific. Boise Cascade and Potlatch were other important competitors that had plants nearby RMF in the northwest (see Exhibit 5).

Georgia-Pacific was a diversified wood and paper company headquartered in Atlanta, Georgia that offered consumer goods, building materials, chemicals, and other industrial products. In fact, wood products represented less than 8% of the company's $25 billion annual revenue. However, Georgia-Pacific was the top producer of industrial panels, which included particleboard. It had no particleboard plants in the northwest. In contrast, Louisiana-Pacific was headquartered in Portland, Oregon and was a more focused wood products company with $2.4 billion in sales. Relative to RMF, Louisiana-Pacific's closest particleboard plant was in Missoula, Montana, and it accounted for 43% of the company's particleboard capacity.

A company closer regionally was Boise Cascade, based in Boise, Idaho. Even though Boise Cascade was one of the largest wood products companies, with sales of $2.4 billion, it was not a leader in particleboard, and its only particleboard plant was in LaGrande, Oregon. The plant ran at 99% of its 200 million square feet capacity for a 3/4" basis.

Potlatch Corporation was another nearby competitor, and it had $1.8 billion in annual sales, of which $0.5 billion was in wood products. Potlatch's particleboard plant had a capacity of 70 million square feet of 3/4" board and ran at 96% of capacity. Though almost seven times larger than RMF's plant, the Potlatch plant was about one-third the size of Boise Cascade's. This niche size reflected Potlatch's belief, "...that competitiveness in this industry is largely based on individual mill efficiency, rather than the number of mills operated, and on the availability of resources on a facility-by-facility basis" (Potlatch 10K405 report).

In conducting this study of the industry and RMF's competitors, Luke had uncovered a number of challenges facing RMF, and to some extent, the strawboard industry in general. One challenge was that even though strawboard was theoretically stronger and offered better moisture resistance than wood particleboard, these advantages were not widely understood by the general public and had been difficult to communicate to RMF's early prospective customers. Luke had realized in the course of his research that educating customers about the various properties of strawboard was a challenge mainly because the market in general remained undeveloped due to the small size of the strawboard industry. It constituted less than half of one percent of the total wood-and agrifiber-based products produced in the U.S. (Sellers, 2001).

The industry's small size and undeveloped market also meant that prices were generally negotiated for individual sales or contracts, leaving Luke unable to find industry-wide strawboard prices for comparison purposes. Instead, to get an idea of the appropriateness of RMF's pricing for its most popular size in 2002, $300 per thousand square feet for 3/4" boards, he compared it to the January price of 3/4" particleboard, the substitute product against which RMF was competing. Luke determined that RMF's price was more than 25% greater. Even though strawboard was stronger, more moisture resistant, and environmentally friendlier than particleboard, Luke wondered whether it could justify such a premium given the challenges RMF faced educating its customers.

Luke also came to realize that leading companies in the wood industry had "deep financial pockets." Moreover, they typically owned vast forest resources, ones that could withstand seasonal weather and be harvested nearly year around. In contrast, residual straw was harvested annually and its quality was highly susceptible to the timing of rain and temperature fluctuations, which could result in highly variable raw material quality and cost. Luke had also found that one of RMF's strawboard competitors, Isobord Enterprises, took a somewhat novel approach to dealing with straw acquisition. It didn't actually purchase straw, but rather purchased the right to go on to farmers fields to remove the straw itself after harvest. Isobord then used a fleet of 38 tractors to bale and remove the straw from farmers' fields, giving it greater control of straw quality and cost (Christianson, 1999).

While straw represented the primary ingredient in strawboard by weight, the resin used in the production of strawboard actually presented a greater competitive challenge to the industry because of its cost. MDI, the resin used for strawboard was three to five times more expensive than the urea-formaldehyde resins used in wood particleboard (Sellers, 2001). In response, Luke knew of three separate development projects focused on finding alternate resins for use in strawboard. One involved a consortium of European companies that had developed a patented process that made the same urea-formaldehyde resins used in wood particleboard useable in strawboard. The last that Luke had heard, the consortium planned to license the use of this technology beginning in the first half of 2002. A second alternative on the horizon was the use of soy-based resins. A small start-up company in Iowa had developed and tested soy-based resins in both wood particleboard and strawboard, and the evidence was that they would work with either. The company was in the process of building a production facility, which it expected to complete later in the spring. The resins were to be priced comparable to urea-formaldehyde resins. Finally, a Canadian research laboratory had reportedly developed a substitute urea-formaldehyde type of resin that would work with straw. It was unclear if or when this resin would be available and how it would be priced.

MARKET OPPORTUNITIES

RMF's original strategy had been to exploit strawboard's green attributes and the lack of strawboard competitors in the Pacific Northwest. Luke felt that markets for "green" products should still be the most receptive to strawboard and would offer the greatest opportunity for obtaining price premiums over traditional particleboard. These markets could be pursued through either selling to manufacturers interested in using green materials in their products or through selling directly to building material distributors or retailers who featured such products. Before going further into either of these areas, Luke first decided he needed an understanding of the end green consumer.

Luke found that the Green Gauge Report (2000), published annually by Roper-Starch, provided a reasonable overview of the U.S. public's interests and intentions with respect to buying green products. This report classified people into five broad categories that ranged from "true-blue greens" to "basic browns." True-blue greens, who represented about 11% of the population, were the most pro-actively green group in the U.S. They recycled, composted, wrote letters to their congressional representatives, and volunteered to help with environmental causes. These people tended to be the ones to most go out of their way to buy green products. The research indicated, however, that true-blue greens were only willing to pay about 7% more, on average, for green products compared to a competing non-green product. The other group identified that also tended to buy green products was the "greenback greens." These people, while less likely to make lifestyle changes in support of a better environment, were more willing to contribute financially. They did this both by donating money to environmental organizations as well as by paying more for environmentally friendly products--up to 20% more, on average. This group, however, represented only about 5% of the U.S. population. Luke did note that both greenback greens and true-blue greens were somewhat more likely to live in the West than in other regions of the country.

With this basic understanding of the U.S. consumers' disposition toward green products, Luke turned to the retail market for green products, in particular green building materials. In conducting this research, Luke found an interesting article in Environmental Building News that provided a useful profile of green building material retailers (Yost, 2001). It turned out that there were only a small number of general building material retailers nationwide that specialized in green products. These retailers, however, tended to be concentrated in Colorado, the Pacific Northwest and California, which meant that RMF was the closest strawboard manufacturer to the majority of these outlets (i.e., those in the Pacific Northwest and California). The article had indicated that most of these retailers regularly invested significant time in educating their clients about green building materials and many had branched into green building design and consulting. Luke found this very promising, as he knew that educating consumers about the desirable properties of strawboard was a significant challenge for both RMF and the strawboard industry generally. Many of these retailers were also making use of the Internet to extend their customer base beyond their local business. The article had also indicated that there were about 60 specialized green building material retailers who focused on only a very narrow range of products (e.g., energy conservation products or certified lumber). A complete directory of green building material retailers--the GreenSpec directory--was published by the Environmental Building News organization.

Both the general and specialized green building material retailers tended to receive a premium price for their products relative to comparable, non-green building materials, although Luke had been unable to ascertain an average price premium. Luke did know that the one green building material retailer that was carrying RMF's strawboard--the Environmental Home Center in Seattle--was selling it at about a 20% price premium over comparable retail particleboard prices. Luke also knew that a few larger building product chains were beginning to carry a few products that could be considered green, but were generally not making the stocking of such items a priority and were not doing much to educate their customers about their benefits. While these chains also charged a small premium for green products, Luke knew they were reluctant to stock green products that were significantly more expensive than non-green alternatives.

On the manufacturing side, Luke felt that furniture manufacturers represented the most promising target group of customers to RMF. Furniture makers used a lot of wood particleboard to make less expensive home furniture and office furniture, particularly tables, bookshelves, cabinets, and dressers. The particleboard was either painted or, more commonly, laminated or veneered. Since a laminate adhered to strawboard extremely well, strawboard was ideally suited for use in these applications. Luke felt there were opportunities to sell to either to true "green" furniture manufacturers or to more mainstream furniture manufactures that might be leaning toward using green materials in some of their products.

Luke had found several lists of green furniture manufactures, and based on these lists estimated that there well over 100 such organizations spread around the U.S. As was the case with building supply retailers, these companies tended to be small, and many of them specialized on either one type of furniture (e.g., garden furniture, office furniture) or one type of material (e.g., reclaimed lumber, recycled plastics). Luke was able to find a handful without too much searching who were already using a competitor's strawboard in their furniture. Baltix, in Long Lake, Minnesota, for example, was using strawboard in a variety of desks, bookshelves, filing cabinets and office dividers. Luke found similar companies using strawboard to produce office furniture in Illinois and in Ontario, Canada. The most interesting, and perhaps most promising green furniture company Luke found in his searching was Brandrud Furniture, in Seattle, Washington. Brandrud had been in business since 1955, but only started using green materials in their products in the last five or six years. The company, however, had found that such materials worked well, and currently used some green materials in almost all of their products. Brandrud was making extensive use of strawboard to build the interior frames of many of its furniture pieces. Brandrud's current source of strawboard was Isobord, in Alberta, Canada.

Luke had looked at the more mainstream furniture manufacturers as one of the projects he had done for RMF as its marketing intern. At that time, he had developed a model to help him identify those furniture companies that would have the greatest potential interest in RMF's strawboard. The model was based primarily on screening four factors: (i) how the company positioned itself in terms of quality (a company that positioned itself as high quality was more attractive to RMF); (ii) to what extent the company positioned itself as "green"; (iii) to what extent the company appeared to use particleboard in its products; and (iv) the geographic proximity of the company. Luke had obtained data on over 80 U.S. furniture manufacturers and ranked each according to his model to separate good prospects from those that seemed unlikely candidates to use RMF's strawboard.

One of the top scoring companies was Herman Miller, Inc., the Zealand, Michigan office furniture manufacturer that frequently showed up on Fortune magazine's list of most admired companies. Luke had contacted Herman Miller partly to assess the validity of his model. Herman Miller had expressed some interest in the strawboard because of its "green" qualities, but the company had some concerns about the environmental safety of the MDI resin used in production and had asked for certain testing to be done before it would seriously consider using the strawboard in its products.

While the MDI resin had been certified in general as a result of tests completed by its manufacturer, separate EPA certification was possible and recommended for each unique application involving MDI and formaldehyde resins. Resins could give off toxic fumes and were regarded as hazardous materials unless the particular combination of fibers and bonding process rendered the particular combination environmentally benign. Luke knew that RMF had not invested in the testing required to certify and substantiate such claims due to its cost. However, in his research, Luke discovered that lack of funding for certification was a common problem for the strawboard industry generally (Gorzell, 2001). Even so, all strawboard was currently being made with MDI or an equivalent resin, and many customers accepted the safety of MDI in strawboard without special EPA certification.

Having gathered more information on RMF's strawboard competitors, the characteristics of the particleboard industry, and the market opportunities for strawboard, Luke believed he was ready to consider RMF's options.

OPTION 1: FOCUS ON STRAWBOARD

Turning around the business while remaining focused on strawboard production would at a minimum require finding new customers and solving some of the quality problems RMF had been experiencing in production. The lack of customers seemed the more pressing need. Luke was unsure whether RMF should continue to pursue a variety of customers in the long term, but was confident that in the short term it should focus on either building supply retailers or furniture manufacturers. Luke felt that furniture manufacturers might represent the most promising target group of customers.

Luke had been encouraged by Herman Miller's interest when he had approached them, but knew that he lacked the marketing resources to follow-up on the company's requests for certification testing or even continue contacting other companies that scored high on his model. Luke also wanted to approach potential green-leaning furniture customers with care because he felt that there was a lot of education that needed to occur for them to accept strawboard. In particular, Luke felt that RMF needed to approach these companies' marketing managers rather than their purchasing managers. He believed that if the marketing managers were convinced of the quality and environmental benefits of strawboard, they would make this an element of the marketing and design programs at their own company and essentially force designers to specify strawboard in their products. Alternatively, if RMF went directly to purchasing managers, Luke was afraid he would have to compete head to head with wood particleboard based solely on price, and he knew this was a competition that he could not win.

To pursue this marketing strategy, Luke needed to obtain some additional financial resources to not only hire and support a marketing person, but also conduct any tests that potential customers might need. Some money would also be needed to address the quality problems on the operations side, as these problems were not only costing them money but had also cost them several customers over the last year. What was needed to make this effort work was an infusion of cash for these strategic investments. Luke knew that BGI didn't have additional resources to put into the company and that his Tribe's leaders were concerned about putting significant additional resources into the company without a more concrete plan to achieve profitability.

OPTION 2: PARTNER WITH QUICKSTART BUILDING SYSTEMS

At the end of 2001, RMF had retained the services of Stanford Financial, a financial consulting company, to find additional equity investors that might help RMF with its present situation. Stanford Financial had initially approached the Tribe on behalf of another client, Quickstart Building Systems. Quickstart manufactured wall panels on a semi-automated production line in Burley, Idaho and was in the process of acquiring new, more fully automated equipment. Quickstart's owner was looking for a business interested in either acquiring (or leasing) the Burley facility's existing semi-automated equipment, moving it to its own facility, and using it to produce wall panels under some type of license agreement, or entering into a partnership to share the ownership and management of an expanded wall panel business. The Tribe referred Stanford Financial to RMF, both because RMF might make a logical partner for the wall panel business (at least as a possible supplier of strawboard for the wall panels) and because RMF might benefit from the services that Stanford Financial could provide. After initial discussions, RMF retained Stanford Financial to help it find a way out of its financial dilemma and agreed to pay the company a fee for its services. Stanford Financial had since recommended to RMF that it effectively merge with Quickstart.

The wall panels themselves consisted of a core of rigid spars and ribs sandwiched between two large sheets of OSB. The wall panels included insulation and electrical conduits and could be used for both internal and external walls, including bearing walls. Quickstart produced both standard size panels and custom panels. They could be used in single-family homes, apartment complexes, duplexes, and commercial buildings. Quickstart's owner felt that the primary customer group for wall panels would be contractors who built housing developments comprised of many identical or nearly identical homes. The panels reduced the cost of construction relative to traditionally framed homes because of the significant labor savings that were possible with these panels. Indeed, Quickstart estimated that the use of the wall panels produced a 56% savings in home construction costs compared to a traditionally framed home. Further, according to Quickstart's promotional material, almost anyone, regardless of construction skills, could build with them. To date, Quickstart wall panels had been used in the construction of about 25 homes in a Seattle area housing development and in several Habitat for Humanity homes in the Boise area.

Quickstart had indicated that the production of such panels was highly profitable. The attraction for RMF was that wall panels represented both a way to add greater value to its strawboard product and the potential for a better price. While the cost for RMF to produce these panels out of strawboard might be higher than Quickstart's costs since strawboard cost more than OSB, RMF could probably price the boards comparable to Quickstart's prices and simply operate with a reduced profit margin relative to Quickstart's currently. However, this partly depended on how much of a royalty Quickstart would expect on each panel sold.

Luke knew there were clearly some challenges to overcome if RMF was to pursue the wall panel opportunity. Some of these challenges were technical. RMF's strawboard was not approved for exterior surfaces. Therefore, while interior panels could be built entirely from strawboard, exterior panels would have to be built from either OSB or a combination of OSB and strawboard, (i.e., the strawboard could be used for the ribs and spars and/or for the interior side of the wall panel). In addition to the issue of the exterior rating, many of Quickstart's current panels used boards larger than the 4' x 8' size that RMF could produce. Another potential technical problem was the fact that strawboard did not hold screws quite as well as OSB, although it was unclear if this represented a significant problem or not.

There were also potential economic and business challenges with the wall panel option. The wall panels were very bulky and freight costs were a large unknown. Luke wondered if RMF could get the panels to customers for a reasonable cost. Luke also wondered about the acceptance of wall panels made out of strawboard. OSB was the established material, and it was stronger than strawboard, so Luke was concerned that customers might choose OSB panels over strawboard panels despite the environmental benefits of the strawboard panels. The strawboard panels would have the advantage that a laminate could be applied to them, but Luke wasn't sure that this would be a valuable attribute for the wall panel product.

There were also significant production challenges associated with the wall panels. The process for producing wall panels was an assembly type of process, which was fairly different from RMF's current process used to produce strawboard. Luke knew there was still work to be done to improve the production of strawboard and wondered about the complexity that would come from adding a second manufacturing process. The wall panel equipment, if operating at full capacity, also would require more strawboard than RMF's current processes could produce.

OPTION 3: CLOSE THE BUSINESS AND DECLARE BANKRUPTCY

If the loan-to-grant conversion for which RMF had applied through Farm credit Services was not approved by the USDA, RMF faced the possibility of filing for Chapter 11 bankruptcy. Luke knew very little about such a process. He did know, however, that even if RMF didn't make a lot of money, both the Tribe and BGI wanted the firm to be an on-going business because of their unique motivations for starting the venture. Namely, the Tribe had struggled to diversify the reservation economy to make it less reliant on the casino and accompanying hotel/resort that the Tribe ran, and BGI wanted to find an economical solution to the bluegrass straw disposal problem resulting from the burning bans imposed in Washington in 1996.

Luke was somewhat unclear on the implications to both BGI and the Tribe of a bankruptcy declaration. For example, RMF had entered into a 20-year lease on the Idaho warehouse with the Tribe. Luke was unsure what would happen to the remaining 17 years of this lease in bankruptcy court. Likewise, Luke was unsure how bankruptcy would affect either BGI's or the Tribe's ability to raise capital for future ventures. In total, he knew he did not understand bankruptcy issues well enough to fully evaluate that as an alternative. But he knew it might need to be considered--the Tribe didn't want to keep putting $42,000 into the business each month to keep it afloat if it didn't have the potential to turn around.

THE DECISION

Luke turned away from the window and back toward the financials. He needed to put together a sound recommendation that he could present to both RMF's board of directors and the Tribal Council regarding what should be done about RMF. Could RMF survive as a business producing strawboard, he wondered? He believed in the product, but he knew that wasn't enough. Somehow RMF would have to make money with the product or at least get to breakeven. Could RMF achieve that? Even if it could, what about servicing the current debt load? He felt that maybe some further review of the financials would help him sort out the questions. Luke wanted to avoid dragging things out and sinking more money into the business if things ultimately couldn't be turned around. If the business was shut down, Luke wanted that decision to be based on a sound analysis of the business's long-term potential, not just on the current crisis that was requiring additional input of resources by the owners. Luke knew that whatever decision was made, he would need to develop a plan to implement that decision. Luke also knew a lot of people were depending on him to make the right decision.

CASE REFERENCES

Christianson, R. (1999, November). Wheat Field of Dreams. Wood & Wood Products, 21-25.

Gorzell, K.E. (November, 2001). Finding an Economic and Environmental Balance to the Technology of Producing Building Materials from Agricultural Crop Residue. Presented at 2001 ASAE Annual International Meeting.

Green Gauge Report (2000).. New York: Roper Starch Worldwide.

McCoy, M. (2001, May 28). Dow Picks Up Plywood Stand-In. Chemical & Engineering News, 11.

Potlatch 10-K405 report, year ended December 31, 2001, filed March 27, 2002.

Sellers, T. (2001). Wood Adhesive Innovations and Applications in North America. Forest Products Journal, 51(6), 12-22.

Yost, P. (2001). Getting the Right Stuff: A Guide to Building Material Retailers. Environmental Building News, 10(4), 1-3.

John J. Lawrence, University of Idaho

Doug Haines, University of Idaho

Michele O'Neill, University of Idaho

Exhibit 2

Rocky Mountain Fiberboard--Balance Sheet for the
year ended December 31, 2001

Assets
 Current Assets
 Cash $4,194
 Accounts Receivable 30,663
 Finished Goods Inventory 96,265
 Raw Material Inventory 7,109
Total Current Assets $0,175,978
Long Term Assets
 Property, Plant and Equipment $5,415,252
 Less: Accumulated Depreciation 799,269
 Total Property, Plant & Equipment 4,615,983
 Total Net Intangible Assets 69,011
Total Long-term Assets $4,684,994
Total Assets $4,860,972
Liabilities
 Current Liabilities
 Accounts Payable $851,845
 Current Portion of Long-term Debt 953,005
Total Current Liabilities $1,804,850
Long Term Debt 3,658,380
Total Liabilities $5,463,230
Owners Equity
Sharing Units--The Tribe $1,285,334
Sharing Units--BGI 1,014,000
Retained Earnings (972,423)
Year-to-Date Earnings (1,929,169)
Total Owners Equity $(602,258)
Total Liabilities and Owner's Equity $4,860,972

Exhibit 3

Rocky Mountain Fiberboard--Income Statement for the year ended
December 31,2001

Sales $1,767,435
Sales Returns and Allowances (51,262)
Freight Charges (354,601)
Net Sales $1,361,572
Cost of Goods Sold
Finished Goods Inventory, $113,200
 December 31, 2000
Cost of Goods Manufactured 2,623,831
Total Cost of Finished Goods $2,737,031
 Available for Sale
Less: Finished Goods Inventory, 96,265
 December 31, 2001
Cost of Good Sold $2,640,766
Gross Margin $(1,279,194)
Operating Expenses
Selling Expenses $6,742
Marketing Expenses 2,301
Product Research Expenses 25,210
Administrative Expenses 255,856
Total Operating Expenses $290,109
Operating Profit $(1,569,303)
Net Interest Expense (359,866)
Profit (Loss) Before Taxes $(1,929,169)
Net Income (Loss) $(1,929,169)

Exhibit 4

Rocky Mountain Fiberboard--Statement of Cost of Goods Manufactured for
the year ended December 31, 2001

Materials Inventory Straw $0
 December 31, 2000 Resin 37,440
 Release Agent 1,005
 Propane & Nitrogen 2,413

Total Materials Inventory
 December 31, 2000
Direct Material Purchased Straw $425,346
 Resin 560,928
 Release Agent 42,864
 Propane & Nitrogen 94,178

Direct Material Purchased $1,123,316
Less: Purchase Discounts 2,317
Total Direct Material
 Purchased
Cost of Direct Materials
 Available for Use
Materials Inventory Straw $0
 December 31, 2001 Resin 0
 Release Agent 2,400
 Propane & Nitrogen 4,709

Total Materials Inventory
 December 31, 2001
Cost of Direct Materials
Direct Labor Used Production Labor $611,519
 Quality Control / 19,620
 Inspection Labor
 Packaging 37,023
 Materials
 Straw Storage & 7,550
 Supplies

Cost of Direct Labor
Manufacturing Overhead Equipment Repair $131,701
 & Maintenance
 Plant Electricity 69,912
 Production Employee Taxes, 120,560
 Benefits & Insurance
 Contract Management 41,600
 Depreciation, Building & 320,615
 Plant Equipment
 Building & Equipment Lease 43,706
 Payments
 Miscellaneous Factory 36,196
 Consumables
 Miscellaneous Factory 15,372
 Supplies & Services
 Off-cut & Waste Straw 9,568
 Disposal
 Training 4,141
Cost of Manufacturing
 Overhead
Cost of Goods
 Manufactured

Materials Inventory Straw
 December 31, 2000 Resin
 Release Agent
 Propane & Nitrogen

Total Materials Inventory $40,858
 December 31, 2000
Direct Material Purchased Straw
 Resin
 Release Agent
 Propane & Nitrogen

Direct Material Purchased
Less: Purchase Discounts
Total Direct Material $1,120,999
 Purchased
Cost of Direct Materials $1,161,857
 Available for Use
Materials Inventory Straw
 December 31, 2001 Resin
 Release Agent
 Propane & Nitrogen

Total Materials Inventory $7,109
 December 31, 2001
Cost of Direct Materials $1,154,748
Direct Labor Used Production Labor
 Quality Control /
 Inspection Labor
 Packaging
 Materials
 Straw Storage &
 Supplies

Cost of Direct Labor $675,712
Manufacturing Overhead Equipment Repair
 & Maintenance
 Plant Electricity
 Production Employee Taxes,
 Benefits & Insurance
 Contract Management
 Depreciation, Building &
 Plant Equipment
 Building & Equipment Lease
 Payments
 Miscellaneous Factory
 Consumables
 Miscellaneous Factory
 Supplies & Services
 Off-cut & Waste Straw
 Disposal
 Training
Cost of Manufacturing $793,371
 Overhead
Cost of Goods
 Manufactured $2,623,831

Exhibit 5

Wood Products Competitors

 Total Sales Wood Product Sales
Company ($M) ($M)

Georgia-Pacific 25,016 1,998
Louisiana-Pacific 2,360 2,312
Boise Cascade 7,420 2,400
Potlatch 1,752 518

 Particleboard Particleboard
Company Production (1) Capacity (1)

Georgia-Pacific 967 1,362
Louisiana-Pacific 488 1,000
Boise Cascade 198 200
Potlatch 67 70

(1) All figures are in million square feet.

Source: http://ccbn.tenkwizard.com