The Promise and Perils of Taking Green Products Mainstream

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A little over two years ago, Columbia Forest Products, the country's biggest manufacturer of hardwood plywoods and veneers, launched a new, forward-looking green product. Their PureBond line of plywood products are manufactured using a formaldehyde-free adhesive. Green products are nothing new in the building world, but what makes PureBond stand out is that it's cost-neutral with similar, formaldehyde-based products.

A green building product that performs as well or better than a conventional product for the same cost is still a remarkably rare occurence; so Columbia should have had a gold mine on its hands. But in the "notoriously conservative" forest products industry, as Columbia's John McIsaac describes it, marketing and selling PureBond outside the green building industry was anything but easy.

GreenBiz Radio sat down with John McIsaac to learn about Columbia's experiences, and to share the lessons they learned in the process.

Matthew Wheeland: One of the things I'd like to explore are your company's experiences with rolling out green products, but before we get into that we should talk about the products themselves. So would you tell me about the PureBond products and what makes them stand out?



John McIsaac: Well, the PureBond applies to a range of plywood products, hardwood plywood products, and what makes them stand out is they're formaldehyde-free, using a soy-based adhesive system, and they're cost neutral with traditional formaldehyde-based hardwood plywood.

You know, there's always been, at least for the last 15 years is always has been formaldehyde-free alternatives available, but they have traditionally been quite a bit more expensive, 20 percent to 30 percent more expensive than traditional hardwood plywood. And that's what differentiates PureBond, aside from the fact that it's using soy flour, is that it's cost neutral.

MW: And what led to the development of these products?

JM: Well, a professor at Oregon State University's College of Forestry, Dr. Kaichang Li, was working on alternative adhesive systems for the panel industry, and it was just through his academic endeavors. And he was on the Oregon coast, he was walking down the beach, and he noticed mussels clinging to the rocks along the coast while they were being dashed by waves. He thought to himself, "Well, if they're able to cling to those rocks with all that water crashing down on them, there must be a natural reason for that."

So he tested them in his lab and he discovered that what allowed them to adhere to the rocks was an amino protein that they produced. And so what he did was, through a process called biomimicry he created a similar amino protein adhesive using soy flour. And he was on to something; he realized that if he could find a binder to kind of create a more water-resistant recipe he would have something for the panel industry. So he did that through Hercules, which is a chemical company that produces a binder that's commonly used in paper towels and paper currency.

He got the whole formula put together and he made a presentation to the Forest Products Society a few years back. And we had one of our executives there, who is now a vice president, but back at that time he was a director of innovation for the company. And he, Dr. Li made a presentation on this new technology, and in the audience were many representatives from other forest products companies and adhesive companies, and when he was done everybody was polite and they said, "Well that's great, sounds great. We'll catch you later." And our guy, Steve Pung, went up to Dr. Li at the end of the presentation and he said, "This seems viable. Can we talk further about possibly partnering with you to finance some further research and development?" and that's how the relationship started.

Fast-forward three years and we launched the PureBond product into the market in the -- well, I guess it was the early second quarter of 2005.

MW: And what was the general industry response when you released them?

JM: Initially the industry response was favorable, although our competitors were angry because we had exclusive rights to the patent on this technology for the hardwood plywood industry. So in order for them to use the technology they would have to go through us.

Now since then we have formed an adhesives marketing division, so we sell the adhesive technology to our competitors for a very nominal fee. I wouldn't call it nominal, but a very reasonable fee. So it allows everybody to share in this really wonderful technology.

But their initial reaction was resentment and it was pretty controversial and they set about to kind of trash us with our customers and so forth. They were just pretty much angry.

And also we were actively and very vocally opposed to formaldehyde because we didn't have to use it anymore, so some of the industry associations that were pro-formaldehyde came out against us either. It's been kind of a tough road.

Now it's not so much because all of our competitors have come out with formaldehyde-free alternatives as well. So the technology in many different forms is readily available throughout the market.

MW: So this is without even having to go through your marketing division.

JM: That's correct. And I always thought, "Why do they need to go through us? If we were able to find a viable, economically efficient option, why couldn't somebody else do the same?" But you know, we're part of a very conservative, inflexible, old-line industry, and innovation is not one of the things that we're known for. So when a company comes along that does innovate, it really, really stirs up the pot.

MW: I want to come back to how this has progressed, but can you tell me what lessons did you learn during the process, whether it's about how to market a green product in a not entirely green industry, or about reaching out to other companies within the industry?

JM: Well, we reached out to a lot of companies and in the early months, it's been a couple years now, so I would even say the first year-and-a-half or so, other companies were not really interested in talking to us, primarily because we had a sub-license on the patent that gave, caused an exclusive situation. But we were looking for partners at the time, and they still hadn't gotten it, that it was important to do this. And so that part of it was difficult. Nowadays it's gotten a little easier and I think everybody's coming around to realizing this is necessary.

In terms of marketing a green product, it's not hard to market a green product to the architect and design community because they are already tuned into how important that is. Sustainability is not a fad; it's definitely the focal point of almost all modern architecture, whether it's in the residential, commercial, or industrial sectors.

So what we needed to do is we did a very, very strong push in the PR world, which is my domain, and then we also ran a very effective ad campaign in architecture and design publications too.

But one of the things that was essential to our campaign was to educate the various publics about the health dangers of formaldehyde. It's a known human carcinogen, designated as such by the International Agency for Research on Cancer, which is part of the World Health Organization. And a lot of other agencies are coming out with the same, the same decision on that.

So I think that we kind of, we're effective in educating our highly focused end users and now, through some of the other things that are happening in the media, including the FEMA trailer disasters, I think the general public's becoming aware that formaldehyde is a bad actor, just like lead and paint and asbestos and stuff like that.

MW: You said that architects and designers were already onboard with the product or the ideas behind the product.

JM: Yeah.

MW: Was it limited to the green architecture and design worlds, or has it gone beyond that since then?

JM: Well, I think every major architectural firm in every major city in America has somebody on staff who's a LEED-accredited professional. And I wouldn't call that necessarily green building; I think that's just a piece of the intellectual makeup of most architectural firms anymore, especially in the commercial world, because that's where you see the most focus on energy efficiencies and the environmental health and so forth.

So they've been following this for a while; I would say 10 or 15 years. But when they start calling for formaldehyde-free products and all of a sudden they're offered something that doesn't cost them any extra, it kind of starts a revolution in the industry. And that's what we did.

MW: And, let's see, let me think how best to phrase this. Why was the industry so resistant to a product that, at least on paper, offers only positive? If it's cost-neutral or cost-competitive, is you know, more friendly to the environment and for the workers, to the environment of the planet, why was the industry so resistant do you think?

JM: Well, there's a couple of reasons. First, it's an old-line conservative industry that does not like change. That is an answer in and of itself. The second part is we had an exclusive on this patent. And the third part is we drew attention to the fact that they were manufacturing products with formaldehyde in 'em.

And they really, a lot of manufacturers in the panel industry are aware that formaldehyde is not a good thing, but they haven't been regulated in the United States up until now, until these regulations in California that were just voted in. So they were able to kind of, you know, I won't say pull the wool over the eyes of the public, because most domestic producers of plywood do not manufacture products with heavy amounts of formaldehyde, but a lot of the large cabinetmakers and case goods furniture makers buy panels from China, and the Chinese manufacturers ship a lot of very, very toxic formaldehyde-laced panels and products into the United States because we don't have regulations.

So all of a sudden we called attention to the fact that there's formaldehyde in these products and it really -- it riled a lot of people. You know, they were worried because it would drive their costs up if they had to start specifying formaldehyde-free panels to make cabinets. And that's true if they didn't buy our panels, but they got angry with us for making them seem like they were putting toxic products into the marketplace. Well, they were. And it wasn't necessarily the domestic producers' fault, but a lot of the companies who were importing the toxic panels from China are American companies. So they need to kind of revamp the whole way they look at their manufacturing. And regulations need to affect imports just as much as they do domestic panels.

And that's one of the things that they were pushing for. I think the anger has pretty much been diffused and we're not in the crossfire anymore. It's more leveled at the Chinese producers, but I'm not worried about them, because they will do what it takes to sell in the United States.

MW: I think that segues very nicely into the next thing I wanted to mention, which was you said that all the manufacturers now have some sort of formaldehyde-free product.

JM: They do.

MW: What led to that? Was it technological innovation? Was it events like the horrible effects of the FEMA trailers, or these upcoming formaldehyde regulations in California, which we'll talk about again in a moment? What led to this widespread adoption?

JM: It was I would say almost 100 percent spurred on by the regulations in California, because California is the largest state in the United States, most populous state, it's the fifth or sixth largest world economy, and you cannot ignore it. Then furthermore, what California does in terms of environmental regulations usually follows in other states, and certainly immediately in Oregon and Washington, and generally it spreads east from there.

So these manufacturers aren't dumb; they realize the handwriting's on the wall. Plus lots of them are manufacturing cabinets in the Midwest and selling them into California, and the regulations affect everything -- if you're doing business in California, it doesn't matter if you're making the goods there or selling the goods there from another, you know, point of origin, the regulations apply. So that's why they've done this.

You'll even see it in their advertising; it says "CARB compliant" call it. CARB stands for California Air Resources Board.

MW: And just for background, explain to me the regulations that are taking place in California.

JM: Well, I without -- I have to get a piece of paper to actually go into all the various parts per million and everything that -- there's the technical aspects of it. But basically it's a two-phase set of regulations beginning in 2009 and it affects composite wood products. Composite wood products as a category are comprised of hardwood plywood; MDF, medium density fiberboard; and particleboard. And in the hardwood plywood segment of that there's the veneer core hardwood plywood, which is the bulk of what we make, and there's the composite core hardwood plywood, which means a layer of veneer on the face and a layer of veneer on the back and then the middle, the core, the substrate is completely made up of MDF or particleboard.

So basically over the course of two phases starting in 2009 and ending in I believe 2012, it virtually eliminates all the formaldehyde and it eliminates all but background levels in the veneer core and composite core hardwood plywood and very, very low levels in the composite core or the MDF and the particleboard. And the highest is what the Europeans demand right now. Is that clear?

MW: Yes -- and this affects all wood products, right?

JM: It's wood products and specifically composite wood products, especially panels. It doesn't affect the structural panels that you use in sheathing and sub flooring and so forth, but particleboard, MDF, and hardwood plywood, interior grade panels. And when the regulations are fully implemented in 2012 or 2013, they'll be the toughest comprehensive regulations on the planet.

MW: And how do you expect these to affect both your company and the forest products industry?

JM: Well, for our company I would expect that they will affect us positively because we already meet the Phase II criteria right now. Our hardwood plywood is formaldehyde-free, or as formaldehyde-free as you can get without, you know, even taking into account the natural formaldehyde that's in the ambient environment, because certain things give off formaldehyde, and trees do and a lot of natural things. It occurs in the process of decay in a lot of living things.

But I'm talking specifically about urea formaldehyde, which is created in the lab and used in adhesive for wood products, 'cause we don't use it in our P&R manufacturing process.

MW: Okay, great. And in closing, are there any tips or lessons that you would give to companies who are embarking on something like this, whether it's using green products or marketing green products or anything along these lines, any tips that you would give to companies from this experience?

JM: Well, I would encourage all companies that can apply sustainable manufacturing principles to their business to do so, because what we call green building right now, in five years that will just be building. The whole concept of sustainability by design is here to stay, you know. It's not a fad. Especially in the wood products industry, we have one of the most inherently sustainable industries out there.

MW: Explain that a little bit.

JM: Well, what's more sustainable than wood? You grow trees and they grow back. You know. It's really actually, you know we've, in years past we've come under fire, not necessarily my industry, but the softwood industry for logging practices. But sustainable forestry is one of the greatest examples of environmental stewardship out there. Not only -- because it benefits the economy as well.

MW: Not to get into too big of a digression, but I think that the forestry industry as a whole has a fair amount of marketing of itself to do to explain that it is in fact sustainable.

JM: It does. You know, there was one of the biggest private timber holders, Hampton Affiliates, John Hampton, who died a few years ago. And he said that, before he died he said that the forest products, the greatest fault or flaw in the forest products industry was not educating the public about, of the good practices that it performed, you know.

And we were always, you know, like I said, the hardwood industry has never been part of the whole Spotted Owl and that kind of thing. But there's a lot of good coming out of the wood products industry. You know, you look at the chemical industry and compare the wood products industry, there's quite a difference.

MW: Sure, and there's enough there for a whole other interview I think.

JM: Yeah.

MW: All right, great. Well thanks very much for taking the time to talk with us.

JM: No problem.

Matthew Wheeland is the managing editor of GreenBiz.