Logging Contractors’ Growth in the Southern Cone: An Analysis of Contractor Business Strategies, Innovation, and Mechanization

Abstract

Forest plantations have increased in South America for several decades. Harvesting is performed mainly through contractor companies. Our hypothesis is that logging contractors that innovate, grow more than others. We analyzed logging contractors through production and innovation, working in Argentina (22), Brazil (35) and Uruguay (10), through surveys between 2008 and 2012. Factors that affected firm growth were analyzed with linear mixed effect models. In all three countries there was a preponderance of logging contractors with cellulose companies. Our results show that logging firms that had mutualistic supply chain relations with the contracting organizations had better production indicators and lower cost per ton than other independent harvesting contractors. In the last 10 years, mechanization increased significantly, reducing the number of employees. Innovation was the most significant variable in enhanced logging production. For the period from 10 to 5 years before the survey period, the number of employees and type of contracting company were most significant on loggers’ growth. During the last 5-year period before the survey period, the number of employees and innovation were significant. Thus, during the last 10 years, logging companies shifted from growth based on type of the firm to the amount of innovation by firms, and contracting companies.

Logging Industry in the United States: Employment and Profitability

“…The output and hours worked declined in most states since 1997, but output declined at a slower pace than hours worked, which led to labor productivity growth. These findings are consistent with the studies in Uruguay, Argentina, Brazil [22], New Zealand [4], and Nordic countries [21].…”

“…Although the employment in the logging industry declined, the number of logging equipment operators remained stable, from 22 Technical advancement is another main reason for declining employment. We estimated the rate of growth in labor productivity of some states in the South, Southwest, and the West (Table 2).…”

“…Since logging wages have increased at about the rate of inflation and the interest rate remains low, logging firms continue to mechanize in many countries [2,[21][22][23][24]. In the U.S., Capital investments were mostly used for harvesting and transportation equipment, in addition to buying stumpage [16].…”

Business Strategies and Competitive Advantage: Evidence from Flour Mill Companies in Lagos State, Nigeria

“…Similarly, Majid, Yasir, Yasir and Javed (2019) portrayed strategy as a perceived long-range plan of a business, which provides and sustains shareholders value. Mac-Donagh et al (2019) argued that strategy is the basic long-term goals and objectives of a firm and the adoption of the courses of action and the allocation of resources necessary for achieving the goals. Pereira et al (2019) explained that it consisted of combinations of competitive moves and business approaches that managers employ to please customers, compete successfully, conduct operations and achieve organizational objectives.…”