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----------------------------------------------------------{ January 22, 2009 }Changes in the Market
It is difficult to pick up a trade journal these days and not read more than one article competing for one of our industry’s most valuable resources, wood fiber. From new pellet fuel plants to lumber mills shutting down to land clearing coming to a hault, all the news is not good. It makes you wonder what our industry will look like ten years from today.
The basic business principles of supply and demand will have an impact on our industry’s future in several ways. The demand for landscape goods has grown steadily for the past two decades. While today’s economy is challenging, it is fair to assume demand will grow at a small percentage rate or at least be maintained. Even at the same level of demand, diminishing supply will leave us without enough product because fiber supplies continue to dwindle. Fiber supplies have temporarily been replenished from lackluster sales for the last six months. Each and every region of the country has been significantly challenged to maintain required raw material inventory over the past 12 months.
Typically, when demand continues to surpass supply, prices rise and new products enter the market. Amerimulch has spent the past year gathering information on two emerging opportunities targeting that void in material supply; Top Spray and Colored Aggregate. We have built a prototype aggregate coloring system and look forward to putting it into production in the Spring of 2009. Several companies in different areas have explored the Top Spray service during 2008. Our objective for 2009 is to test market both of these opportunities and confirm the data obtained to date. We will then bring forward a fully competent program that will include detailed costs and end-market value.
Market forces continue to shape and reshape every industry. Amerimulch embraces the opportunity to develop new products and services that will help our customers grow profitably.
Posted at 11:37 AM | Link to this Article