FPL GTR 165

LamLum: A Tool for Evaluating the Financial Feasibility of Laminated Lumber Plants

A spreadsheet-based computer program called LamLum was created to analyze the economics of value-added laminated lumber manufacturing facilities. Such failities manufacture laminations, typically from lower grades of structural lumber, then glue these laminations together to make various types of higher value laminated lumber products. This report provides the documentation for LamLum. Click here to download LamLum (Excel Spreadsheet)

Extensive screenshots from the program are presented in FPL GTR 165. LamLum incorporates discounted cash flow analysis to determine under what conditions a laminated lumber plant might be profitable. LamLum can also be used to aid in payroll and employment planning. Break-even analysis is incorporated to calculate the maximum amount that may be paid for laminations while still returning the required rate of return on invested capital to owners.

Plant and equipment, raw materials, wages, administration costs, and working capital are linked to provide cash flow tables and summary financial measures for profitability analysis. A summary cash flow chart and a pie chart showing key cost categories simplify analysis. In addition to cash flows and basic financial measures, LamLum provides physical product flows with respect to both wood inputs and wood product outputs.

LamLum is structured so that users may easily perform a sensitivity analysis on revenues and key costs without going into the detailed assumptions. Cost contingency factors allow major cost categories to be changed independently of the sensitivity analysis. Products, species and grades, and lamination costs may be changed over time to allow for changing resource requirements or availability and thereby
provide flexibility in planning. Extensive built-in annotation in the spreadsheet provides guidance and help. Built-in warnings and error messages help reduce input errors and inform users when and why their results might not be believable.

Where to get more information:

Study this manual to become familiar with the terminology and concepts used.

For further general information or to obtain assistance with problems you may encounter while using this model, contact: E.M. (Ted) Bilek, US Forest Service, Forest Products Laboratory, One Gifford Pinchot Drive, Madison, WI, 53726–2398, email: tbilek@fs.fed.us, telephone: (608) 231–9507.

LamLum is intended to facilitate the evaluation of the economics of laminated lumber plants. While this model has undergone exhaustive testing to ensure its integrity, the Forest Service cannot guarantee its accuracy or suitability for use. This model relies on user-provided projections. Accuracy of data collection, data entry, and interpretation of results are the responsibility of the user. Neither the author nor the Forest Service will accept responsibility for financial losses that may result from the use of the model.