Arizona Forest

   Restoration

  Products Inc.

Welcome to Arizona Forest Restoration Products Inc.

Ability to Compete

"Thanks to a major investment in world class German OSB manufacturing technology, and also to its unique geographical location advantage, AZFRP will rank among the lowest production cost manufacturers in North America, and will be the lowest delivered cost supplier to its natural market of the Southwest."

The AZFRP Team

Production capacity correction

“Louisiana Pacific’s management believes that, of about 30 billion s.f. of OSB capacity that is either completed or to be completed, there appears to be about 10 to 11 billion s.f. that is either been shut down permanently or shut down indefinitely, CFO Curt Stevens said during a conference call with analysts in early March 2009.”

Source: Wood Based Panels International http://www.wbpionline.com/news/fullstory.php/aid/543/brutal_times.html  

Balanced supply & demand

The North American OSB production capacity correction reflects a re-balanced supply and demand equilibrium at a lower volume than existed at the peak of the housing "bubble."

The production capacity that was shut down permanently had not been economically competitive for some years and only stayed on line over the years of the housing boom because of the inflated prices created by the building of excess houses during the speculation “bubble”. This economically obsolete capacity has been dismantled and is not coming back on line.

The production capacity that was shut down indefinitely was also operating at higher production costs. It is not expected to come back on line until market prices rebound sufficiently to make higher production costs competitive again due to demand exceeding the lower production costs supply.

Ability to compete

OSB pricing

OSB pricing follows tightly the cyclical highs and lows of the housing market. With the housing market modest restart and the significant production capacity reduction during the recent market contraction, OSB pricing has already rebounded and is expected to continue to rebound strongly.

The bottoming out of the housing market and of the OSB price in 2009 allowed AZFRP to verify that it will be able to serve the Southwest market profitably at any point along the cyclical highs and lows of the housing and OSB markets in the foreseeable future.