Roseburg Acquires Simsboro Facility

Roseburg Acquires Simsboro Facility

ROSEBURG ACQUIRES SIMSBORO FACILITY 

Roseburg Forest Products has entered into an agreement to acquire Flakeboard’s particleboard manufacturing and laminating facility in Simsboro, La.

“This acquisition demonstrates our continued commitment to the composite industry and the customers we serve,” states Allyn Ford, Roseburg’s CEO and president. “Through our purchase of the plant in Simsboro, Roseburg will own one of the most modern continuous presses in the United States. This unique opportunity will fill a gap in our product line, allowing us to better meet the current and emerging needs of our composite customers.”

The transaction is expected to be completed this summer.

In the Southeast U.S. Roseburg currently operates particleboard plants at Taylorsville and Louisville, Miss. and Russellville, SC; and laminating plants at Oxford, Miss. and Orangeburg, SC.

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Temple-Inland Says ‘No’ to IP Offer

Temple-Inland Says ‘No’ to IP Offer

Temple-Inland Says ‘No’ to IP Offer

On June 6, International Paper, the world’s largest producer of pulp and paper, made public a $4.1 billion hostile takeover bid for Temple-Inland Inc. in order to increase its share in the North American containerboard market. Not long after the initial official offer was made, Temple-Inland officially rejected the bid saying that it “grossly undervalues the company.” With paper and packaging prices rebounding after the recent financial crisis, International Paper’s share in the market would increase from 27% to 37% if they were able to acquire the company, according to Fox Business. The acquisition would also cut costs in International Paper’s corrugated packaging business.

International Paper first communicated its proposal verbally to the chairman of Temple-Inland on May 17. Subsequently, there has been a phone call, a face-to-face meeting between the two sides, and two letters of correspondence from the respective chairmans. International Paper was informed in a letter from Temple-Inland’s chairman dated June 4 that the board of Temple-Inland had unanimously rejected International Paper’s offer. In response, International Paper sent a letter to Temple-Inland on June 6 expressing its continued interest in pursuing an acquisition.

Temple-Inland is viewing the bid as an opportunistic attempt to take advantage of its stockholders at a time when the building products market is weak. The company’s lumber and building materials business is not part of International Paper’s core business, and, upon a takeover, the unit’s future would be uncertain, according to Bloomberg. In the event that the takeover takes place, it would mark International Paper’s largest acquisition since its $6 billion purchase of the packaging and recycling business of Weyerhaeuser in 2008.

Following the bid rejection by Temple-Inland, International Paper asserted that it is prepared to consider all alternatives to complete the transaction, including taking an offer directly to the shareholders. The company has now launched a public campaign to build support for its offer. Questions are also beginning to arise as to whether or not International Paper will decide to increase its bid.

International Paper stands to acquire seven containerboard mills and more than 60 box plants, along with several building products facilities, from Temple-Inland in the event of a takeover. International Paper CEO John Faraci commented, “We are very disappointed with the response of Temple-Inland’s Board of Directors. We believe that our proposal offers clearly superior and compelling value to Temple-Inland’s shareholders. Our proposal reflects the future business plans and economic outlook for Temple-Inland and for the sector, and incorporates a significant portion of the cost savings resulting from the merger of International Paper and Temple-Inland, while at the same time creating value for International Paper shareholders.”

Temple-Inland Chairman and CEO Doyle Simons responded to Faraci’s statement:

“Since we launched the ‘new’ Temple-Inland in January 2008, we have delivered superior results to our stockholders compared with our corrugated packaging peers, building products peers, and the S&P 500. Since that time, our total return to stockholders of 22 percent greatly exceeds the 5 percent total return that IP has achieved. Through our proven ability to execute our strategy focused on maximizing return on investment and profitably growing our business, the board believes the company will continue to provide superior results for our stockholders. As the economic recovery continues and the benefits from our strategy continue to be realized, it is the stockholders of Temple-Inland who should gain from those anticipated benefits, not the stockholders of IP.”

IP’s Faraci also stated, “We are confident that Temple-Inland’s shareholders will support our proposal. We have taken the step of making this letter public to explain directly to your shareholders our proposal, our actions and our commitment.”

 

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Arizona Fire Reflects Opportunity Burning

Arizona Fire Reflects Opportunity Burning

Arizona Fire Reflects Opportunity Burning

Story by Dan Shell, Managing Editor

With wildfires burning out of control in northeast Arizona, spreading into New Mexico and parts of Colorado, Pascal Berlioux could be forgiven for exclaiming a loud “I told you so!” to those who oppose taking direct action to address forest health issues in Arizona and other parts of the U.S. West. In the region, ongoing drought and higher temperatures are combining with two decades of unmanaged public forest holdings to create a tinderbox just waiting for a lightning strike, a tossed cigarette butt or—in the Arizona Wallow fire’s case—an abandoned campfire to ignite years of forest fuel buildup thanks to overstocked, unthinned timber stands that are more susceptible to pest infestations and fire hazards.

Berlioux is the President and CEO of Arizona Forest Restoration Products, a group of investors who have pledged to build an OSB and OSL plant in northern Arizona near Winslow—if only public land managers could offer a degree of certainty that the mill could acquire the timber it needs to run.

The group’s plan would provide two major benefits: creating a source of jobs for the area at the plant, but perhaps most importantly the facility would bring a sizable forest products player to the area that could serve as a linchpin for small log and biomass utilization. In doing so, the facility would provide a critical market for low-quality timber and other material coming from public forests in the region, giving logging contractors and other landowners a much-needed destination for material that’s produced through timber stand improvement operations.

Like other regions of the Intermountain West, Arizona is facing forest health and wildfire concerns of epic proportions, covering millions of acres. In that state, the Four Forests Restoration Initiative, which is essentially a four national forest stewardship project on steroids, seeks to remediate forest health conditions on 2.4 million acres during the next 20 years. Long-distrustful stakeholder groups ranging from environmentalists to wise-use advocates have signed on to the project and pledged to make it work.

But the biggest obstacle to the project’s success (outside of preservationist legal challenges, which are always possible no matter what “consensus” is thought to be reached) is a commercial market for the biomass and solid wood products coming off affected timberland. Here’s why: Forest officials estimate costs for stand improvement average $1,000/acre. With 2.4 million acres in play, that’s a lot of thousands. And with deficit reduction the watchword for federal spending these days, there’s no way the Forest Service will be given the money to simply pay contractors for forest health improvement. It’s simply not gonna happen.

Without providing a commercial outlet for the material coming off those lands and financial incentive for contractors to go in and remove fuel, the forest health situation will instead be resolved “naturally” through a series of raging wildfires that damage wildlife habitat and water quality, not to mention some of the most beautiful landscapes America has to offer.

Meanwhile, Congress continues to fund firefighting instead of fire prevention and wise-use advocates and environmentalists warily try to hold hands in a forest health stewardship project lifeboat, wondering whose interests are going overboard. And all the while, opportunities to create jobs and improve forest health are burning.

Article by Dan Shell, Managing Editor Team Member Since 1988 Contact Information: Phone 334-834-1170, Fax 334-834-4525 Email [email protected]

 

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