Our focus on customers and improved operating efficiencies helped the Wood Products sector withstand the challenges of a mixed market. Domestically, our oriented strand board and plywood markets benefited from another year of robust housing starts. This was offset, however, by the effects of the Japanese economy on lumber.

Weak demand from Japan pushed import and domestic lumber into the US market resulting in low prices despite high demand. In 1998, our Wood Products sector produced: Operating earnings of $208 million, excluding nonrecurring charges associated with changes to our Western Canada lumber operations to make them more competitive. This compares with $212 million, excluding charges associated with the closure of two plywood facilities and an export lumber mill, in 1997. Net sales of $4.5 billion compared with $4.6 billion in 1997. Over the next five years, we will enhance the earnings potential of this sector by: Focusing on customers. >