Good morning. I’m pleased to be here this morning
in Louisiana, my one-time home state, and to have this chance to talk to
the Louisiana Logging Council.
First I want to commend
you on the fine work you do everyday, in the woods and in your communities.
I know the value of your work to the forest-products economy and to the
livelihood of your communities. Professional loggers are important partners
for Weyerhaeuser Company and other forest products manufacturers.
You make forestry’s best practices happen on the ground. You make
sustainable forestry a reality in the woods and the marketplace. And, your
role continues to grow in importance.
In Louisiana, Weyerhaeuser
looks to you for a steady supply of raw materials to our nine manufacturing
operations. In addition, professional loggers are key to our certification
to the Sustainable Forestry Initiative.
Weyerhaeuser
announced in February of this year that all of our U.S. timberlands are
certified to Sustainable Forestry Initiative™ standards. This SFI certification
includes the million-plus acres which Weyerhaeuser owns and manages in Louisiana.
With the acquisition of Willamette and its timberlands in the north and
central part of the state, Louisiana is now Weyerhaeuser’s most significant
timberlands state in the South. We are now Louisiana’s largest industrial
landowner, and that’s a stewardship responsibility we take seriously.
Weyerhaeuser employs more than 2,100 people at 18 manufacturing
operations and offices in Louisiana.
Our capital investment
in your state is significant. From 1998 to 2002, we invested more than 61
million dollars in our Louisiana operations.
Our presence
in Louisiana greatly benefits from our relationship with professional loggers.
For us and for other timberland owners, loggers are a critical partner in
land stewardship. This is true because many of the SFI criteria depend on
the harvesting process. We depend on you to assure that streamside management
zones are handled correctly, and that harvesting makes the least possible
impact to water and soil quality.
As you know, environmentalist
groups have gone to the marketplace, asking our customers to prove the wood
products we supply are grown and harvested in a sustainable way.
Both industrial and non-industrial private landowners are able
to assure their compliance with sound environmental practices through certification
programs such as SFI and the American Tree Farm system.
The
continuing education and professionalism of independent loggers play a key
role in such certification programs. Your participation is essential if
we are to meet demand for sustainable forest products.
As
you work with your customers … the landowners and manufacturers … the Louisiana
Logging Council can help with many of today’s challenges.
A
prime example of continuing education is the Louisiana Master Logger program.
This type of training assures landowners … especially us at Weyerhaeuser
… that they have chosen loggers who know their business and know the importance
and impact of best management practices on the land.
Your
work with innovative and low impact harvesting techniques, like cut-to-length
logging is another way you can work with landowners to reduce impact on
the land and meet sustainability goals. We commend you on these programs
which add to our high level of confidence in today’s professional logger.
Safety is another key area where we can work together. Safety is
top priority at Weyerhaeuser, and we seek out contract loggers that share
that value. We believe OSHA program continues to help reduce accidents.
You should be proud that this program began in Louisiana.
One
subject Clyde asked me to talk about today is the global marketplace and
how it affects us.
Today, we all compete in a global
marketplace. With that in mind, here are some facts for you to ponder:
- Substitutes for wood – such as steel, plastic and cement
– have made serious inroads into some of our product lines. Our industry
is taking action which I’ll describe later today.
- Currently,
there is flat to declining demand for many wood and paper products here
in the U.S. … although the world market is growing and long-range forecasts
encourage us to continue investing in our forestlands.
- In
the past, the strength of the U.S. dollar has significantly hurt U.S. competitiveness
vis-à-vis European and other providers.
- We’re dealing
with a global recession.
And here are some
additional concerns the forest products industry faces:
- Real prices for many of our finished products have been declining
over time.
- One can grow trees faster and for less
cost in the Southern Hemisphere. Not only is the Southern Hemisphere producing
fast growing trees, such as eucalyptus, we’re seeing loblolly pine being
grown on a 22-year sawlog cycle. That’s more than double the growth rate
in Livingston Parish.
- We also face much greater environmental
and other regulatory constraints than producers in many other nations do.
- Finally, countries that once imported many American
wood and paper products are now either sourcing them from other countries
or developing their own capabilities.
Now,
looking at the facts I just enumerated, let me ask you: What does the future
of the American forest products industry look like? Not as rosy as we would
like. But we shouldn’t throw in the towel. We do have some advantages: skilled
labor … competitive freight costs into home markets … some of the highest-value
tree species in the world … products that are certified to have come from
sustainable forests … great forestry schools … an entrepreneurial spirit
… and – many of the best foresters – and loggers – in the world.
To compete, however, companies like Weyerhaeuser must continue
to drive costs down in our manufacturing and in our forestry practices –
i.e., do more with less.
In this regard, we need to
continue improving the growth rates and commercial attributes of the trees
we grow for wood and paper production. We’re an innovative people. We can
do this.
A second thing we can do is advocate for equivalent
environmental regulations worldwide – regulations which ensure effective
stewardship of the world’s working forests. American forest products companies
should not be penalized in the marketplace for achieving high standards
of forest stewardship.
One of the movements that’s helping
level the playing field is the push for certification of forests and forest
products.
As one might expect in a democratic society,
there is debate over whose standards should prevail. As you know, Weyerhaeuser
is a supporter of AF&PA’s Sustainable Forestry Initiative standards
– or SFI.
My interest is to make sure that the environment
is protected … that American forest products can compete … and that American
forest owners can control their destiny.
If we are prohibited
from doing so, not only the forest products industry, but our nation’s forests,
will suffer.
Yes, it’s a tough market, globally and otherwise,
for many aspects of the forest products community, including the logging
sector.
How can we keep loggers like yourself – who have
faced increased costs and reduced prices – in business and logging our mills
in the future?
I am sure you’ve learned the same lesson
which we have: that our operations have to run as efficiently as possible
to be competitive and stay in business. That’s become a standard for our
company and it’s probably had to be for yours, too.
End-users
like Weyerhaeuser can help you succeed in small ways … like providing a
better turnaround time at the mills for log trucks … that allow for that
critical extra run from the woods every day.
And, programs
like Weyerhaeuser’s Contractor Management System encourage maximum production
from equipment in the woods to increase efficiency and reduce costs.
Also, the resources of the logging council are here to help your
businesses.
Another question I’ve been asked is: What
about the future of the timber market in Louisiana and the South?
In Louisiana and the South, landowners are seeing fluctuating prices
on both pulpwood and logs. As a commodity, market timber price is dependent
on many factors. Wet weather has added to the uncertainty on the raw materials
market this year, as you well know.
I know that Weyerhaeuser
will need to continue to purchase logs and pulpwood on the open market,
to complement production on our own lands.
But, I am
not here to predict the timber market. However, I do predict that the partnership
between the professional logger, landowners and forest products companies
will continue to grow and prosper.
As demand for “certified”
wood products and building materials increases in the marketplace, the loggers’
role in the chain of custody of timber becomes more important. Highly trained,
certified master loggers will be key to the certification of all our wood
… including gate wood … to the nation’s wood product manufacturing facilities.
This is an exciting partnership in challenging times.
But by working together, we can build a successful tomorrow for our employees,
our customers and our communities.
Thank you, and now
I will answer any questions you have.
