Distinguished guests, esteemed colleagues, ladies and gentlemen, good morning:
It is a real pleasure to be part of this panel, to be in the company of such distinguished leaders on this stage; to be part of a gathering of such expertise and knowledge about the global forest industry.
Our focus in this session is to create dialogue about the future of this industry. Often when we gather in these forums, we find ourselves preoccupied with challenges, changes, markets, issues and trends that we confront.
This morning is different. I enjoy the challenge of planning for the future and one of the first questions I ask my management team: “Is the future something that happens to us, or is the future what we make happen?”
It makes a difference, doesn’t it? There are three kinds of people in the world: those who make things happen; those who want to stop things from happening; and those who are trying to figure out, “what happened?”
Our industry is peopled by those from the first group, the group that wants to make things happen. We have to be – our planning horizons are decades long. But rapidly changing markets in a rapidly changing world means we also have an imperative for action.
We have to see the forest and the trees and the market at one and the same time. We need to manage our businesses today; and we need to see where markets are going and what they are telling us so that we can create future opportunities.
Just as each seedling goes into the ground to shape the future forest, we can and will shape our own future. We will learn, adapt, and innovate to deal with market challenges, technology changes, social and political issues and trends.
Does this sound like the bar is set too high? Maybe future planning is unsettling for some industries. But with our products, there is every reason to be excited and confident – even optimistic about what the future holds. After all, we are in an industry that meets today’s needs with a natural resource that is renewable, reusable, and recyclable. We make products people use and rely on every day.
In the developed world, our customers and markets appreciate and value the full range of products that come from the forest. We can be proud that from trees we can produce human shelter, furniture, paper and absorbent fiber, containers, packaging and bags -- a multitude of products to meet a multitude of human needs.
In the developing world, much wood is still used only as fuel for cooking or heating. These people want and deserve the security and comforts we enjoy. Trees – literally and figuratively – hold the seeds to that better life.
There are future markets with billions of people who will use and benefit from the forests we sustainably manage, and the products we produce. They could value the efficiency and comfort of a wood frame house. They could diaper their babies with modern fluff products. Their communities could prosper around our manufacturing plants, and their landscapes could include our well managed forests. These markets form the foundation for solid, sustainable businesses well past the next decade and, indeed, the century. If we can’t plan a place for our industry to help the world to attain a higher quality of human life, well, shame on us.
So let’s start with the clear notion of a future that people in his room will help to create, and shape, and in some cases lead. Society looks to private enterprise to be bold, to take measured risks, to create solutions, and to implement workable strategies in a changing and uncertain environment. It is what we do.
So my first bit of advice for the future is to keep on keeping on. Promote and develop products from wood with pride. Respect the values of the market place. Meet the expectations of our shareholders.
We need to embrace the idea of triple bottom lines, recognizing that robust and successful financial performance enables progress towards even better environmental stewardship and accelerated social development. Being successful jugglers is part of most of our job descriptions. Keeping these three balls in the air takes focus, concentration, and flexibility. We are experienced in this challenge.
Over the past decade, this industry has significantly improved its environmental performance, and reduced its environmental footprint. We are part of the environmental solution for the future. Both in how we make our products - we renew our resource, we reuse waste materials and we respect the many uses for the land. And in what we produce - our products help the world address needs critical to society.
The 2x4’s that frame a single family home do more than hold up the house. They store carbon pulled out of the atmosphere by a tree for the lifetime of that house. The newspaper that brought you this morning’s box scores comes from fibers that have been recycled and can be recycled again.
We will continue down the path of progress. Persistent market campaigns targeting forest products, such as the boreal campaign, make it clear however that we have not turned the corner with the ENGOs.
So the first goal we must set for ourselves is to internalize environmental stewardship. Humans are part of the ecosystem too, and their needs form an integral part of the equation.
We must continue to develop science-based and environmentally-benign solutions that balance the needs of humans with the needs of nature. In that way, we will continue to earn the trust and confidence of the marketplace, of our communities -- that our actions and performance on the ground deserve. We can do this.
Listening to voices around the globe, we are hearing an increasing emphasis on sustainable social development, a theme mentioned earlier. There is a growing population in the developing world that still lacks the basic human needs for food, clean water, shelter and clothing. These populations rightly aspire to an improved quality of life. Wood fiber and responsible forest management, as it turns out, help to meet needs in every one of those areas.
We in the forest products industry have a leadership opportunity to help meet these needs in the developing world. We have a moral responsibility to make the investments and plans necessary to grow with the world demand for our products. We can and we must, and in doing so can contribute to meeting all three of our bottom lines: social, financial and environmental.
Our shareholders expect a competitive rate of return and improved financial performance. Our customers expect products that are cost competitive and innovative. Our employees expect sustainable and safe meaningful jobs. Our communities expect responsible corporate citizenship. All expect ethical behavior. And all are beginning to demand a higher level of social responsibility. We are listening.
For the next few minutes let me put on my more-familiar business hat.
Much as I might like to share Weyerhaeuser’s business strategies with you today, both law and experience dictate that our actions must speak for us in this regard. So I can’t tell you everything. But I can describe a few of the things we are doing about our own future over the next decade.
I can start by noting that our portfolio is well-balanced and diversified. As a result of executing the strategy of growing by acquisition, we have been able to take advantage of scale to lower manufacturing costs and focus on chosen market segments.
We have disciplined our use of capital. We have been divesting non-strategic assets throughout the portfolio—you’ve already heard tell of some of those in recent days here in B.C.
Using the knowledge of wood fiber characteristics gained from over 100 years of growing trees, combined with our research and development capability, we are repositioning our product portfolio to gain advantage.
Our global strategies reflect two major trends in forest product markets: more low cost fiber coming from southern hemisphere plantations, and extraordinary growth in China and elsewhere in Asia, including India, Korea, Indonesia and others.
We have successful plantations in Uruguay, New Zealand and Australia. China will be short of wood fiber to source increased manufacturing capacity in pulp, paper and packaging. We are a major exporter of both recycled and virgin fiber.
China in particular is experiencing explosive growth in areas where we have expertise, and where people are improving their quality of life -- housing, appearance wood for furniture and interior finish, packaging for consumer goods, and forest plantation establishment. We are experienced marketers to China and have been there continuously for 25 years.
Weyerhaeuser celebrated its centennial in 2000. Many of us depend on forest rotations that range anywhere from eight years or less, to eighty years or more. So thinking out ten years is not so much a stretch.
So my message this morning is quite simple. Let’s be an industry that makes things happen. Let’s be thought of as a key building block to a sustainable global economy.
Maturing markets in North America and Europe will demand different strategies than dynamically-growing markets in Asia. Our manufacturing and marketing strategies will need to be as nimble as our minds.
When you consider all the natural advantages and strengths we have as an industry – people, knowledge, ingenuity, experience, we should feel excited and confident about the future.
We meet human needs with a natural resource that is renewable, reusable, recyclable. We play a role in sustainable development – economic, environmental, and social. If we can cut a straight board from a curved log we can certainly think our way into leadership in the 21st Century.
We have expertise and products that can dramatically improve the quality of life for those emerging from poverty in the developing world. With all of these things going for us, success is there, within our reach. Let’s go get it.
Thank you for your attention, I look forward to our dialogue.
