Wood Containers, NEC

SIC 2449

Industry report:

This industry classification includes companies that primarily make wood containers, not elsewhere classified, such as cooperage, wirebound boxes and crates, and other veneer and plywood containers. Companies that primarily make tobacco hogshead stock are in SIC 2421: Sawmills and Planing Mills, General, and those making cooperage stock are in SIC 2429: Special Product Sawmills, Not Elsewhere Classified.

This classification covers makers of nearly any wooden container that is not either a pallet or a nailed or lock corner box. Many containers in this classification are made from staves, heads, and hoops--a group of products called cooperage. Containers made in this way include barrels, storage vats, and buckets. Tight cooperage refers to containers used to store liquids, such as wine casks, beer barrels, or hot tubs. Containers built to hold solid materials are called slack cooperage. Cooperage is usually built in one facility from pieces constructed elsewhere.

The wood used for staves varies depending on the material to be shipped or stored. For instance, high quality white oak is used for aging bourbon, while seafood is often shipped in smaller kegs made of southern yellow pine. Hoops can be made from steel, wire, or wood.

Wirebound boxes are another part of this industry classification. About 60 percent of wirebound boxes are used for agricultural clients, such as fruit and vegetable growers. The military and private industries also use wirebound boxes. Unlike coopered container producers, wirebound box makers often process their own lumber or veneer. The technology for making wirebound boxes is relatively simple: box parts move down a conveyor belt, wire is stapled to the box, then a fastening machine binds the wire ends together.

Although the value of miscellaneous wood container shipments grew steadily throughout the late 1990s, from $546 million in 1997 to $654 million in 2000, shipments in 2001 declined to $650 million. This was partly due to competition from containers made without wood, such as corrugated paperboard and plastic. Also, because containers that clients want vary in size and shape, their production cannot be automated as easily as a standard-sized product like wood pallets

According to 2007 figures published by the U.S. Census Bureau, 2,909 establishments operated in this category, down only slightly from 2,924 in 2004. Value of industry shipments rose from $5.7 billion in 2005 to $7.2 billion in 2007. Employment figures also increased, from 50,674 in 2004 to 58,467 in 2007. Eighty-one percent of employees were production workers. According to Dun and Bradstreet's 2009 Industry Reports, Ohio employed the most people in the wood container manufacturing industry. California had the highest percentage of sales, followed by Wisconsin, Florida, Georgia, and New Hampshire.

Research and Markets reported that revenues for the wood container and pallet manufacturing industry in the United States reached $6.3 billion in 2008. Unlike many sectors of the U.S. manufacturing industry, this category was not struggling with decreases in production or gluts of imports from overseas. The United States exported $254.5 million worth of products to 119 countries in this category, whereas imports from 71 countries were valued at only $500,000. In addition, demand for quality wood containers was not expected to fade, regardless of the non-wood containers available. This, coupled with weak foreign competition, hinted at a positive future for the U.S. wood container industry in the twenty-first century.

The top industry leaders in overall sales were large corporations that integrated wood container production into their own operations to create economies of scale. Con-way Inc. of San Mateo, California, used wood containers in its trucking operations and had annual sales of $4.2 billion in the mid-2000s. Brown-Forman Corp. of Louisville, Kentucky, which used wood containers to age and transport its distilled liquors, had sales of nearly $3.2 billion for fiscal 2009. Greif Inc. of Delaware, Ohio, generated sales of about $3.7 billion in 2008, focusing primarily on container manufacturing. Finally, Sonoco Products Co. of Hartsville, South Carolina, posted revenues of $4.1 billion in 2008.

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