Georgia-Pacific Corporation

views updated May 29 2018

Georgia-Pacific Corporation

133 Peachtree Street, Northeast
Atlanta, Georgia 30303-5605
U.S.A.
Telephone: (404) 652-4000
Fax: (404) 584-1470
Web site: http//www.gp.com

Public Company
Incorporated: 1927 as Georgia Hardwood Lumber
Company
Employees: 75,000
Sales: $25.02 billion (2001)
Stock Exchanges: New York
Ticker Symbol: GP
NAIC: 321211 Hardwood Veneer and Plywood Manufacturing; 321212 Softwood Veneer and Plywood Manufacturing; 321213 Engineered Wood Member (Except Truss) Manufacturing; 321219 Reconstituted Wood Product Manufacturing; 327420 Gypsum Product Manufacturing; 322110 Pulp Mills; 322121 Paper (Except Newsprint) Mills; 322130 Paperboard Mills; 322210 Paperboard Container Manufacturing; 322232 Envelope Manufacturing; 322233 Stationery, Tablet, and Related Product Manufacturing; 322291 Sanitary Paper Product Manufacturing; 326140 Polystyrene Foam Product Manufacturing; 326199 All Other Plastics Product Manufacturing; 421310 Lumber, Plywood, Millwork, and Wood Panel Wholesalers; 421330 Roofing, Siding, and Insulation Material Wholesalers; 422110 Printing and Writing Paper Wholesalers; 422130 Industrial and Personal Service Paper Wholesalers

Georgia-Pacific Corporation is a leading manufacturer and distributor of paper-based consumer products, pulp, office paper, packaging, and building products. Overall, it ranks as the world’s second largest forest products company, trailing International Paper Company. The company holds the number one position worldwide in tissue products, producing paper towels, paper napkins, and bath and facial tissue under such brands as Quilted Northern, Angel Soft, Brawny, Sparkle, and Vanity Fair. Its Dixie business is the leading North American brand of disposable tableware, including plates, cups, and cutlery made of paper, plastic, and foam. Georgia-Pacific’s bleached pulp and paper segment holds the number two position in North America in communications paper and the number three position in market pulp. The company’s Unisource Worldwide, Inc. subsidiary is one of North America’s largest distributors of printing and imaging paper, packaging systems, and related supplies. In packaging, Georgia-Pacific is a major North American producer of containerboard, corrugated containers, and other packaging products. The company’s building products segments ranks first in North America in structural wood panels, second in gypsum wallboard, and third in lumber. Other building products made by Georgia Pacific include siding, decorative panels, hardboard, particleboard, and fiberboard. In addition, the company runs a building products distribution business that is one of the largest suppliers of such products to lumber and building materials dealers and major do-it-yourself warehouse retailers. Unlike most other major forest products firms, Georgia-Pacific does not own any timberlands, having sold off its timber holdings in 2001.

Early Decades of Geographic and Operational Expansion

Although its operations in the 21st century range widely, the company’s beginnings were in lumber distribution. Georgia Hardwood Lumber Company began operation in 1927 in Augusta, Georgia, as a hardwood lumber wholesaler with $12,000 in start-up funds provided by its founder, Owen R. Cheatham. During its first decade in business, the company began lumber manufacturing in addition to its wholesaling activities. Cheatham focused on expanding the company’s milling capabilities in the southern United States (the company was operating five sawmills in the South by 1938), a strategy that allowed it to become the largest supplier of lumber to the U.S. Army during World War II. The company’s purchase of a plywood mill in Bellingham, Washington, in 1947 coincided with plywood’s growing popularity in the construction industry and gave the company a strong competitive advantage.

Additional plywood mills in Washington and Oregon were purchased in 1948, as well as another plywood plant in 1949, to support this growing business area. The company changed its name in 1948 to Georgia-Pacific Plywood & Lumber Company to reflect more accurately its geographic and operational expansion. The following year the company went public with a listing on the New York Stock Exchange.

In 1951, the company changed its name again, to Georgia-Pacific Plywood Company. Cheatham gradually developed a reputation as an industry maverick. Over the next six years, he conducted a $160 million timberland-acquisition program in the western and southern United States. To finance this program, he borrowed heavily from banks and insurance companies expecting that the proceeds gained from the timber in the future would more than cover the required return on their investment. In order to be closer to these newly purchased resources, the company moved its headquarters from Georgia to Olympia, Washington, in 1953, and then again to Portland, Oregon, the following year.

Over the next decade, Cheatham used his financing model several times to acquire additional forest acreage and manufacturing facilities, including Coos Bay Lumber Company and Hammond Lumber Company in 1956. That same year the company’s name was changed, for the third time since its founding, to Georgia-Pacific Corporation. Subsequent purchases of Booth-Kelly Lumber Company in 1959 and W.M. Ritter Lumber Company in 1960 took the company to the number three position in its industry.

The company’s unorthodox approach to growth was evident in other areas as well. It opened a kraft pulp and linerboard mill in Toledo, Oregon, in 1957, and its first resin adhesive plant at Coos Bay, Oregon, in 1959. The latter manufacturing operation was intended at first to supply the resin required for the company’s plywood-production business but gradually grew large enough to supply resin to other plywood manufacturers as well. Georgia-Pacific was also one of the first manufacturers to use wood byproducts rather than timber in pulp production. The company continued to pioneer in the development of plywood products, eventually shifting away from the traditional use of Douglas fir to a process using less-expensive southern pine. This wood previously had been considered inappropriate for use in plywood because of its high resin content.

During the 1960s, Georgia-Pacific embarked upon another series of acquisitions by buying several lumber and paper companies across the country. These included Crossett Lumber Company (Crossett, Arkansas) in 1962; Puget Sound Pulp and Timber Company (Bellingham, Washington), Vanity Fair Paper Mills (Plattsburgh, New York), St. Croix Paper Company (Woodland, Maine), and Fordyce Lumber Company (Fordyce, Arkansas) in 1963; Bestwall Gypsum Company (Paoli, Pennsylvania) in 1965; and Kalamazoo Paper Company (Kalamazoo, Michigan) in 1967. With the purchases of Puget Sound Pulp and Timber and Vanity Fair Paper, Georgia-Pacific entered the tissue business. After building its first corrugated-container plant in Olympia in 1961, the company added a series of additional manufacturing facilities for lumber, paper, and chemical products over the course of the rest of the decade.

Struggles in the 1970s

Upon Cheatham’s death in 1970, Robert B. Pamplin, who had worked with Cheatham since the company’s inception, became chairman and chief executive officer. Although the company’s building-products business benefited from the housing boom of the early 1970s, its paper and pulp interests struggled because of low prices and sluggish demand. To bolster its manufacturing operations, the firm expanded production of two new building materials, polyvinyl chloride (PVC) and particleboard, the former through a joint venture with Permaneer Corporation. Georgia-Pacific opened its own PVC manufacturing plant in 1975. When the cost of oil increased soon afterward, however, the company’s prices for its PVC-molding products proved to be too high to compete effectively with wood moldings, resulting in significant losses.

It was also during this period that the firm was required by the Federal Trade Commission (FTC) to defend its acquisition of 16 small firms in the South that supplied the company with 673,000 acres of the southern pine used to make plywood. Charging that the acquisitions tended to create a monopoly, the FTC issued a consent order in 1972 that forced Georgia-Pacific to divest 20 percent of its assets. This step resulted in the formation of a spinoff company called Louisiana-Pacific Corporation. The order also prohibited the firm from acquiring any other softwood plywood companies and imposed restrictions on timberland purchases in the South for five years and on plywood mill acquisitions for ten years.

Company Perspectives:

Georgia-Pacific Mission: Through excellence in all we do, the resourceful people of Georgia-Pacific grow our value and create wealth for our investors by providing value-added forest products that enable our customers and consumers to enhance where they live, work, and play.

Georgia-Pacific Vision: Georgia-Pacific will be a premier worldwide manufacturer and marketer of choice for value-added forest products. Employees will choose us because we reward excellence and we believe people make the difference. Customers and consumers will choose us because we provide superior products and services at competitive pnces. Investors will choose us because we will consistently deliver returns in the top quartile of all major companies.

A slump in the housing industry in 1973 and 1974 depressed the company’s lumber and plywood business. Georgia-Pacific continued to post record profits, however, largely because of the growth of its chemical, pulp, and paper operations. These areas experienced slowdowns as well by the middle of the decade. Nevertheless, the company moved forward in its long-range program to increase manufacturing capacity across the board. It expanded through vertical integration into the production of additional chemicals derived from wood wastes, such as chlorine, phenol, and methanol. The 1975 acquisition of Exchange Oil & Gas Corporation enabled the company to become more self-sufficient by developing its own reserves of important raw materials required for the operation of its chemical plants.

In 1976 president Robert Flowerree succeeded Robert Pamplin as chairman and chief executive. A 25-year Georgia-Pacific veteran, Flowerree had been instrumental in taking the company into the chemical business. He was also considered to be more cautious than his predecessors. Under his leadership, the firm expanded its building products to include roofing materials, which it began to produce in a converted paper mill.

By 1978, the company was drawing three-quarters of its sales from the southern and eastern United States. This shift away from the West was instrumental in the decision to move the headquarters of the firm back to Georgia, specifically to Atlanta, 150 miles away from its original location. The relocation, completed in 1982, caused many employees to leave the company, and several senior executives chose to retire rather than make the move. This shift left the firm vulnerable at a critical time, particularly in the growing chemical area.

Turnaround in the 1980s

The dawning of the 1980s brought with it another housing slump, but Georgia-Pacific was able to use its chemical business to maintain overall growth. Its plywood products, however, were slowly losing competitive ground to new and cheaper materials, such as waferboard and oriented-strand board, which were being manufactured and sold aggressively by such firms as Louisiana-Pacific and Potlatch Corporation. Until then, Georgia-Pacific had not placed significant emphasis on these materials, with only one plant producing waferboard and another producing oriented-strand board. Most of its capital expenditure was directed instead toward upgrading existing facilities and buying timberlands.

In 1982, T. Marshall Hahn, Jr., who had succeeded Flowerree as president in 1976, became chief operating officer. When he became chairman and chief executive officer one year later, following Flowerree’s early retirement, he faced several serious problems. Demand for paper was strong, but only in the area of higher-quality products, not in the basic linerboard and kraft paper sectors in which Georgia-Pacific concentrated. Although an upturn in the construction industry augured well for the company’s building products business, the high interest rates on the debt the firm had used to fund expansion severely limited its freedom to take advantage of opportunities in that area. Furthermore, its chemical business, once the firm’s star division, fell on hard times as sales dropped significantly. This business was sold to Georgia Gulf Corporation in 1984, followed by the sale of Exchange Oil & Gas in 1985. The company retained its specialty chemicals business, which continued to deliver good returns.

Hahn instituted a series of measures designed to get the company back on its feet. These included reviewing the health of its assets, improvement of cost controls and productivity, and continued investment in areas such as the pulp and paper business, which could insulate the company from future economic calamities and provide a hedge against cyclical upturns and downturns in the various industries in which the company operated. In 1984, Georgia-Pacific acquired a linerboard mill, several corrugated container plants, and over 300,000 acres of forest from St. Regis Corporation. It converted two paper plants to the production of higher-margin products, such as lightweight bleached board and white paper used by copiers and computer printers. It also successfully expanded a wood products mill in South Carolina and a plant in Florida to produce lattice and fencing materials, which were in heavy demand.

Key Dates:

1927:: Owen R. Cheatham founds Georgia Hardwood Lumber Company in Augusta, Georgia, as a hardwood lumber wholesaler.
1938:: After expanding into lumber manufacturing, the firm now operates five sawmills in the South.
1947:: Expansion to the West Coast begins with the purchase of a plywood mill in Bellingham, Washington.
1948:: The company’s name is changed to Georgia-Pacific Plywood & Lumber Company to better reflect the geographic and operational expansion.
1949:: Georgia-Pacific Plywood & Lumber Company goes public.
1951:: The company is renamed Georgia-Pacific Plywood Company.
1956:: The company’s name is changed to Georgia-Pacific Corporation.
1957:: Company expands into pulp and paper sector with the opening of a kraft pulp and linerboard mill in Toledo, Oregon.
1963:: Georgia-Pacific expands into the tissue business with the acquisitions of Puget Sound Pulp and Timber Company and Vanity Fair Paper Mills.
1972:: A Federal Trade Commission consent order forces the company to divest 20 percent of its assets, which are spun off as Louisiana-Pacific Corporation.
1982:: Headquarters are relocated to Atlanta, Georgia.
1990:: Great Northern Nekoosa Corporation is acquired.
1997:: Timber operations are split off into a separate operating group, the Timber Company, with its own common stock.
1999:: The company acquires Unisource Worldwide, Inc., a major distributor of printing and imaging paper and supplies.
2000:: Fort James Corporation is acquired for $7.7 billion in stock and cash plus the assumption of $3.3 billion in debt.
2001:: Georgia-Pacific sells four fine-paper mills to Domtar Inc. for $1.65 billion; Timber Company is merged into Plum Creek Timber Company, Inc., marking Georgia-Pacific’s exit from the timber business.

In 1986, the company entered the premium bathroom tissue market through the introduction of Angel Soft bath tissue. By the end of 1987, Georgia-Pacific’s tissue and towel operation, combined with its production of linerboard, kraft, and fine papers, enabled the company to achieve higher profitability in paper products than in wood products for the first time in its history, despite tough competition from major consumer products companies such as the Procter & Gamble Company. Other elements of Hahn’s turnaround strategy included further decentralization of the company’s operations, which forced plant managers to compete with each other for capital funds, and the addition of several building materials distribution centers nationwide to capitalize on the growing trend toward remodeling and do-it-yourself projects.

During the last few years of the decade, the company made further acquisitions. These included U.S. Plywood Corporation and selected assets of the Erving Distributor Products Company in 1987 and Brunswick Pulp & Paper Company and American Forest Products Company in 1988. Its most controversial purchase, however, commenced in 1989 with an offer to buy Great Northern Nekoosa Corporation of Connecticut, a competing producer of pulp, paper, containerboard, lumber, and plywood.

Early to Mid-1990s: Acquisition of Great Northern Nekoosa and Cost-Cutting Initiatives

Originally incorporated in 1898 as the Northern Development Company but soon renamed Great Northern Paper Company, the predecessor to Great Northern Nekoosa had begun producing newsprint in 1900. By 1924, it was manufacturing corrugated paper and a decade later began a gradual transition from wrapping paper to business paper production. The company expanded its pulp and paper operations over the next 40 years. In 1970, the Great Northern Paper Company and the Nekoosa Edwards Paper Company merged to become Great Northern Nekoosa Corporation. Great Northern Nekoosa acquired several firms subsequently to enhance the company’s manufacturing and distribution capabilities, including Heco Envelope Company in 1973; Pak-Well in 1975; Leaf River Forest Products in 1981; Barton, Duer & Koch, and Consolidated Marketing, Inc. in 1982; Triquet Paper Company in 1983; Chatfield Paper Company in 1984; J&J Corrugated Box Corporation and Carpenter Paper Company of Iowa in 1986; OwensIllinois’s forest products company in 1987; and Jim Walter Papers in 1988. By 1989, Great Northern Nekoosa was operating 55 paper mills and paperboard converting plants, 83 paper distribution centers, one plywood plant, and two sawmills.

Great Northern Nekoosa was a particularly attractive candidate for acquisition because of its depressed stock price. Georgia-Pacific saw the combination of the two companies as an opportunity to achieve economies of scale and other cost savings. In Hahn’s opinion, the acquisition would enable Georgia-Pacific to add manufacturing capability at less expense than by building its own plants. On the other hand, Great Northern Nekoosa viewed Georgia-Pacific’s $3.74 billion bid as a hostile takeover attempt. It attempted to halt the proposed buyout with a series of lawsuits and an extensive search for another buyer. All of these measures failed, however, and the purchase was completed in March 1990. Georgia-Pacific assumed a significant amount of debt as a result, but was able to eliminate part of the burden through the subsequent sale of several mills and some timberland to Tenneco, the John Hancock Mutual Life Insurance Company, and the Metropolitan Life Insurance Company.

With its hard-fought acquisition of Great Northern Nekoosa complete, Georgia-Pacific held market leadership positions in containerboard, packaging, pulp, and communication papers and was a major producer of related products, such as tissue, kraft paper, and bleached board. The most significant threat to the company’s continued growth would be the economy’s effects on its key business areas. Although the firm’s diversification into paper and pulp manufacturing was intended to help it survive cyclical downturns in lumber and housing construction, its new business areas were also highly cyclical in nature, with peaks and valleys lagging only months behind those occurring in lumber and housing.

Paper prices fell soon after Georgia-Pacific closed the Great Northern Nekoosa deal, but true to plan, the declining paper market was offset by record profits in the company’s building products division, which posted profits of $432 million in 1990 despite low levels in housing starts. Georgia-Pacific was also able to reduce a significant amount of the $8 billion debt it saddled through its Great Northern Nekoosa purchase, thanks to the company’s healthy cash flow. Despite these favorable signs, net income fell to $365 million in 1990, down from $661 million in 1989.

Prices of Georgia-Pacific shares on the New York Stock Exchange fell almost 50 percent in 1990 in response to investors’ fears that the company might be acquiring too much debt. To ease this concern, the company took out a two-page ad in national magazines to convey the message that the company had significant cash flow to pay down its debt and had laid the groundwork for a strong future.

Despite Georgia-Pacific’s intentions, profits took a dive in 1991 when the bottom dropped out of both the building materials and pulp and paper markets. The company reported a net loss of $151 million, compared to profits of over $3 million the preceding year. Georgia-Pacific continued to rely on its substantial cash flow to pay shareholders and pay down its debt in 1991.

In 1991, the company also reorganized its building products division along product lines, as opposed to its previous method of management along geographical lines. It also completed the expansion of its Ashdown, Arkansas, paper mill with the addition of the world’s largest and fastest paper machine. A.D. (Pete) Correli, who joined Georgia-Pacific’s paper division in 1988 after being wooed from his position at the Mead Corporation, was elected president and chief operating officer.

Despite its continuously healthy cash flow and record-breaking profits in its building products division, the company posted losses again in 1992. In response to the recession, which continued to affect Georgia-Pacific’s key businesses, management chose to focus on keeping costs down and reducing debt. Georgia-Pacific did this by paring down its “nonstrategic” assets, selling its Butler Paper distribution operations (acquired as part of its purchase of Great Northern Nekoosa) to Aleo Standard Corporation in 1993 and its roofing manufacturing business to Atlas Roofing Corporation the following year. Also divested in 1994 was its envelope manufacturing business (another Great Northern inheritance), which was sold to Sterling Group Inc. (which would later emerge as Mail-Well, Inc.). Proceeds from these sales went to further reduce the company’s debt.

By the time that Correll succeeded Hahn as Georgia-Pacific’s chairman and CEO during 1993, the company’s financial outlook began to look brighter. Housing starts were on the rise again, and lumber production remained far below demand. Lumber prices began rising to record highs in October 1993. Georgia-Pacific had grown to become the largest supplier of building lumber in the United States and was perfectly poised to benefit from improvements in the economy. The pulp and paper market, meanwhile, began a strong recovery in 1994, enabling the company to return to profitability after two years in the red. The improving conditions led the firm during 1994 to launch a two-year, $1.75 billion capital improvement program, focusing primarily on expanding its strongly performing engineered wood products operations. Surging pulp and paper prices enabled Georgia-Pacific to post record profits of $921 million on record revenues of $14.31 billion in 1995. The pulp and paper market began to enter another slump, however, late that year.

While the market was still surging, Correll launched a number of initiatives aimed at making Georgia-Pacific the most cost-efficient company in the industry. A major restructuring of the building products distribution operation, aiming at cutting costs and increasing sales, began in 1994. This led to the announcement in mid-1995 that 60 of Georgia-Pacific’s 130 building products distribution centers would be closed by early 1997. Later in 1994 the company launched the Mill Improvement Program to cut costs and increase efficiency at the firm’s 14 large pulp and paper mills. A little more than two years later, the mills had each identified cost savings of $20 million to $40 million per year. Finally, in mid-1995 the building products manufacturing operation launched Operation Complete, eventually identifying nearly $200 million in cost savings and productivity improvements at the 140 facilities of that company unit.

Georgia-Pacific used some of its profits from the heady results of 1995 to bolster its gypsum wallboard capacity. It paid about $350 million in early 1996 to acquire nine wallboard plants from Domtar Inc., based in Montreal, Canada. Moving quickly to counter the effects of the sliding paper prices, Correli, in May 1996, launched a three-year effort to reduce overhead costs by $400 million. The effort included a hiring freeze and an early retirement program for salaried employees. In late 1996, Georgia-Pacific announced that it would sell a number of operations based in Martell, California, including 127,000 acres of timberland, a sawmill, and a particleboard plant, to Sierra Pacific Holding Co. The $320 million deal closed in early 1997.

Late 1990s into Early 21st Century: Enter Fort James, Exit Timber

Seeking to increase its overall market value and to free its timber operations from the financial gyrations of its wildly cyclical pulp, paper, and building products businesses, Georgia-Pacific, in December 1997, split off its timber operations into a separate operating group with its own common stock. Georgia-Pacific Corporation essentially became a holding company for two operating groups, Georgia-Pacific Group (all operations other than the timber operations) and the Timber Company (the timber operations), with two classes of common stock for the two groups. The preexisting common stock was redesignated as the common stock of Georgia-Pacific Group, while company shareholders received shares of newly created Timber Company stock.

The late 1990s were also noteworthy for two significant acquisitions. In June 1998, Georgia-Pacific acquired Indianapolis-based CeCorr Inc. for about $190 million plus the assumption of $92 million in debt. CeCorr produced corrugated sheets at 11 sheet feeder plants, with the sheets sold to other firms for conversion into corrugated containers. CeCorr was the leading independent maker of corrugated sheets in the United States with 1997 revenues of $282 million. In mid-1999, Georgia-Pacific acquired Unisource Worldwide, Inc. for about $850 million plus the assumption of $785 million in debt. This acquisition was secured through an unsolicited offer that bested a previously agreed upon bid by UGI Corporation. Based in Berwyn, Pennsylvania, Unisource was a leading North American distributor of printing and imaging paper and supplies, with revenues for the fiscal year ending in September 1998 of $7.42 billion. Georgia-Pacific thus returned in a major way to the paper distribution sector it had been involved in briefly—and more modestly—when it owned Butler Paper from 1990 to 1993.

Also in 1999, Georgia-Pacific combined its commercial-tissue business with Wisconsin Tissue, the commercial-tissue unit of Chesapeake Corporation. The resulting joint venture, Georgia-Pacific Tissue, LLC, was 95 percent owned by Georgia-Pacific and 5 percent by Chesapeake and was managed by Georgia-Pacific. As part of the deal, Chesapeake received $755 million in cash from Georgia-Pacific. The joint venture, kept separate from Georgia-Pacific’s consumer-tissue operations, focused on selling paper towels and tissues to institutions. Meantime, the Timber Company during 1999 sold 194,000 acres of timberlands in northern California for about $397 million and 390,000 acres in Maine and 440,000 acres in New Brunswick, Canada, for about $92 million.

Seeking to gain a more significant presence in the consumer market as a hedge against the wild cycles of its core paper, pulp, packaging, and building products operations, Georgia-Pacific, in November 2000, acquired Fort James Corporation for about $7.7 billion in stock and cash plus the assumption of $3.3 billion in Fort James debt. Fort James’s key products included Brawny paper towels, Quilted Northern bathroom tissue, Vanity Fair napkins, and Dixie plates, cups, and cutlery. Based in Deerfield, Illinois, the company had been formed in August 1997 through the merger of James River Corporation of Virginia and Fort Howard Corporation. Fort James had posted profits of $516.5 million in 1999 on revenues of $6.8 billion. The addition of Fort James made Georgia-Pacific the number one tissue maker in the world. To placate antitrust authorities and complete the transaction, however, the company had to agree to sell its commercial-tissue unit, Georgia-Pacific Tissue, LLC, because of the commercial-tissue operations it was gaining from Fort James, which included the Preference and Envision brands. In March 2001, the unit was sold to Svenska Cellulosa Aktiebolaget SCA for $852 million, with Georgia-Pacific paying Chesapeake $237 million to cover deferred capital gains and for its equity interest in the venture.

Continuing its drive to focus more on consumer products, Georgia-Pacific announced in March 2001 that it would close its pulp mill in Bellingham, Washington. Then, in August, the firm sold four fine-paper mills to Domtar Inc. for $1.65 billion in the largest divestiture in company history. This left Georgia-Pacific with four white paper mills and two pulp mills. The company was looking to unload the pulp mills as well as its specialty chemicals unit. In June, meanwhile, the firm announced it would close three gypsum plants and reduce its gypsum wallboard production by 45 percent in response to industry-wide overproduction that was driving prices down. A divestment even larger and more significant than the sale to Domtar came in October 2001 when Georgia-Pacific completed the merger of the Timber Company into Plum Creek Timber Company, Inc. in a transaction valued at about $4 billion. This marked the exit of Georgia-Pacific from the timber business.

Late in 2001, Georgia-Pacific entered into talks with Willamette Industries Inc. regarding a possible joint venture of the companies’ building products businesses or the sale of Georgia-Pacific’s building products operations to the other firm. Willamette was seeking a way to extricate itself from a hostile takeover bid from Weyerhaeuser Company, but early in 2002 Willamette backed away from a transaction with Georgia-Pacific and agreed to a merger with Weyerhaeuser. Part of Willamette’s concern about a deal with Georgia-Pacific was the possibility of exposing itself to asbestos liabilities. In 1965, Georgia-Pacific had acquired Bestwall Gypsum, which made some gypsum products containing asbestos, which can cause lung disease and other diseases. Georgia-Pacific’s use of asbestos was discontinued in 1977, and the firm had manufactured no products containing the substance since then. Lawsuits began to be filed against Georgia-Pacific in the mid-1980s, but it was not until late 2001, when large jury awards began making headlines and several major companies had been forced into bankruptcy because of their asbestos liabilities, that the issue began to seriously affect Georgia-Pacific. From early December 2001 to late January 2002, the company’s stock lost more than one-third of its value as a result of investor concern about the firm’s asbestos liability. Acting to halt the crisis, Correll announced that the firm would take a fourth quarter 2001 charge of $350 million for anticipated asbestos claims through 2011. The move was intended to quantify the company’s asbestos risk and show that Georgia-Pacific was nowhere near the brink of bankruptcy. Correll emphasized that a third-party study had shown that the company’s total liabilities through 2011 were expected to amount to less than $1 billion.

Whether these moves would be sufficient to lay to rest the asbestos concerns remained to be seen, but Georgia-Pacific was in any event continuing with its drive to transform itself into a consumer products concern. It appeared likely, but not certain, that the company would spin off of its building products operations, and there was also speculation about a divestment of the Unisource paper distribution subsidiary. Seeking further growth for its consumer products, Georgia-Pacific was pursuing endorsement deals with major names, such as stock-car racing legend Richard Petty, who was inked as a new Brawny spokesperson. One other challenge facing Georgia-Pacific in the early 21st century was servicing its high debt load, which stood at $12.2 billion in early 2002.

Principal Subsidiaries

Arbor Property and Casualty Limited (Bermuda); Arkansas Louisiana & Mississippi Railroad Company; Ashley, Drew & Northern Railway Company; Blue Rapids Railway Company; Brown Board Holding, Inc.; Brunswick Pulp & Paper Company; Brunswick Pulp Land Company, Inc.; CeCorr, Inc.; Color-Box, LLC (58%); Fordyce and Princeton R.R. Co.; Fort James Corporation; GNN Timber, Inc.; GPW Timber, Inc.; G-P Gypsum Corporation; G-P Maine, Inc.; G-P Receivables, Inc.; Georgia-Pacific Childcare Center, LLC; Georgia-Pacific Development Company; Georgia-Pacific Foreign Holdings, Inc.; Georgia-Pacific Holdings, Inc.; Georgia-Pacific Investment Company; Georgia-Pacific Resins, Inc.; Georgia-Pacific Shared Services Corp.; Georgia-Pacific Tissue Real Estate Company, LLC; Georgia-Pacific West, Inc.; Georgia Temp. Inc.; Gloster Southern Railroad Company; Great Northern Nekoosa Corporation; NPC Timber, Inc.; NPI Timber, Inc.; North American Timber Corp.; Phoenix Athletic Club, Inc.; The Saint Croix Water Power Company (Canada); Southwest Millwork and Specialties, Inc.; The Sprague’s Falls Manufacturing Company (Limited) (Canada); St. Croix Water Power Company; Tomahawk Land Company; Unisource Worldwide, Inc.; XRS, Inc.

Principal Competitors

International Paper Company; Weyerhaeuser Company; Stora Enso Oyj; Smurfit-Stone Container Corporation; MeadWestvaco Corporation; The Procter & Gamble Company; Boise Cascade Corporation; Kimberly-Clark Corporation; UPM-Kymmene Corporation; Jefferson Smurfit Corporation; USG Corporation.

Georgia-Pacific Corporation

views updated May 29 2018

Georgia-Pacific Corporation

133 Peachtree Street, Northeast
Atlanta, Georgia 30303
U.S.A.
(404) 521-4000
Fax: (404) 521-4581

Public Company
Incorporated: 1927 as Georgia Hardwood Lumber Company
Employees: 60,000
Sales: $12.67 billion
Stock Exchanges: New York Tokyo
SICs: 2421 Sawmills & Planing Mills—General; 2435 Hardwood Veneer & Plywood; 2611 Pulp Mills; 2657 Folding Paperboard Boxes

Georgia-Pacific Corporation is a leading manufacturer and distributor of building products, industrial wood products, pulp, paper, packaging, and chemical products. Although it eventually came to own or control over six million acres of timberland throughout North America, the company did not hold the title to a single tree for the first 24 years of its existence. Instead, Georgia Hardwood Lumber Company began operation in 1927 in Augusta, Georgia, as a hardwood lumber wholesaler with $12,000 in start-up funds provided by its founder, Owen Cheatham.

During its first decade in business, the company began lumber manufacturing in addition to its wholesaling activities. Cheatham focused on expanding the company’s milling capabilities in the southern United States, a strategy that allowed it to become the largest supplier of lumber to the U.S. Army during World War II. The company’s purchase of a plywood mill in Bellingham, Washington, in 1947 coincided with plywood’s growing popularity in the construction industry and gave the company a strong competitive advantage.

Additional plywood mills in Washington and Oregon were purchased in 1948, as well as another plywood plant in 1949, to support this growing business area. The company changed its name in 1948 to Georgia-Pacific Plywood & Lumber Company to reflect more accurately its geographic and operational expansion.

In 1951 the company changed its name again, to Georgia-Pacific Plywood Company. Cheatham gradually developed a reputation as an industry maverick. Over the next six years, he conducted a $ 160 million timberland-acquisition program in the western and southern United States. To finance this program, he borrowed heavily from banks and insurance companies expecting that the proceeds gained from the timber in the future would more than cover the required return on their investment. In order to be closer to these newly purchased resources, the company moved its headquarters from Georgia to Olympia, Washington, in 1953 and then again to Portland, Oregon, the following year.

Over the next decade Cheatham used his financing model several times to acquire additional forest acreage and manufacturing facilities, including Coos Bay Lumber Company and Hammond Lumber Company in 1956. That same year the company’s name was changed, for the third time since its founding, to Georgia-Pacific Corporation. Subsequent purchases of Booth-Kelly Lumber Company in 1959 and W. M. Ritter Lumber Company in 1960 took the company to the number-three position in its industry.

The company’s unorthodox approach to growth was evident in other areas as well. It opened a kraft pulp and linerboard mill in Toledo, Oregon, in 1957 and its first resin adhesive plant at Coos Bay, Oregon, in 1959. The latter manufacturing operation was intended at first to supply the resin required for the company’s plywood-production business but gradually grew large enough to supply resin to other plywood manufacturers as well. Georgia-Pacific was also one of the first manufacturers to use wood by-products rather than timber in pulp production. The company continued to pioneer in the development of plywood products, eventually shifting away from the traditional use of Douglas fir to a process using less-expensive southern pine. This wood previously had been considered inappropriate for use in plywood because of its high resin content.

During the 1960s Georgia-Pacific embarked upon another series of acquisitions by buying several lumber and paper companies across the country. These included Crossett Lumber Company in 1962; Puget Sound Pulp and Timber Company, Vanity Fair Paper Mills, St. Croix Paper Company, and Fordyce Lumber Company in 1963; Bestwall Gypsum Company in 1965; and Kalamazoo Paper Company in 1967. After building its first corrugated-container plant in Olympia in 1961, the company added a series of additional manufacturing facilities for lumber, paper, and chemical products over the course of the rest of the decade.

Upon Cheatham’s death in 1970, Robert B. Pamplin, who had worked with Cheatham since the company’s inception, became chairman and chief executive officer. Although the company’s building-products business benefited from the housing boom of the early 1970s, its paper and pulp interests struggled due to low prices and sluggish demand. To bolster its manufacturing operations, the firm expanded production of two new building materials, polyvinyl chloride (PVC) and particle board, the former through a joint venture with Permaneer Corporation. Georgia-Pacific opened its own PVC manufacturing plant in 1975. When the cost of oil increased soon afterward, however, the company’s prices for its PVC-molding products proved to be too high to compete effectively with wood moldings, resulting in significant losses.

It was also during this period that the firm was required by the Federal Trade Commission (FTC) to defend its acquisition of 16 small firms in the South that supplied the company with 673,000 acres of the southern pine used to make plywood. Charging that the acquisitions tended to create a monopoly, the FTC issued a consent order in 1972 that forced Georgia-Pacific to divest 20 percent of its assets. This step resulted in the formation of a spin-off company called Louisiana-Pacific Corporation. The order also prohibited the firm from acquiring any other softwood plywood companies, and imposed restrictions on timberland purchases in the South for five years and on plywood mill acquisitions for ten years.

A slump in the housing industry in 1973 and 1974 depressed the company’s lumber and plywood business. Georgia-Pacific continued to post record profits, however, due largely to the growth of its chemical, pulp, and paper operations. These areas experienced slowdowns as well by the middle of the decade. Nevertheless, the company moved forward in its long-range program to increase manufacturing capacity across the board. It expanded through vertical integration into the production of additional chemicals derived from wood wastes, such as chlorine, phenol, and methanol. The 1975 acquisition of Exchange Oil & Gas Corporation enabled the company to become more self-sufficient by developing its own reserves of important raw materials required for the operation of its chemical plants.

In 1976 president Robert Flowerree succeeded Robert Pamplin as chairman and chief executive. A 25-year Georgia-Pacific veteran, Flowerree had been instrumental in taking the company into the chemical business. He was also considered to be more cautious than his predecessors. Under his leadership, the firm expanded its building products to include roofing materials, which it began to produce in a converted paper mill.

By 1978 the company was drawing three-quarters of its sales from the southern and eastern United States. This shift away from the West was instrumental in the decision to move the headquarters of the firm back to Georgia, 150 miles away from its original location in Atlanta. The relocation caused many employees to leave the company, and several senior executives chose to retire rather than make the move. This shift left the firm vulnerable at a critical time, particularly in the growing chemical area.

The dawning of the 1980s brought with it another housing slump, but Georgia-Pacific was able to use its chemical business to maintain overall growth. Its plywood products, however, were slowly losing competitive ground to new and cheaper materials, such as waferboard and oriented-strand board, which were being manufactured and sold aggressively by such firms as Louisiana-Pacific and Potlatch Corporation. Until then, Georgia-Pacific had not placed significant emphasis on these materials, with only one plant producing waferboard and another producing oriented-strand board. Most of its capital expenditure was directed instead toward upgrading existing facilities and buying timberlands.

In 1982 T. Marshall Hahn Jr., who had succeeded Flowerree as president in 1976, became chief operating officer. When he became chairman and chief executive officer one year later, following Flowerree’s early retirement, he faced several serious problems. Demand for paper was strong, but only in the area of higher-quality products, not in the basic linerboard and kraft paper sectors in which Georgia-Pacific concentrated. Although an upturn in the construction industry augured well for the company’s building products business, the high interest rates on the debt the firm had used to fund expansion severely limited its freedom to take advantage of opportunities in that area. Furthermore, its chemical business, once the firm’s star division, fell on hard times as sales dropped significantly. This business was sold to Georgia Gulf Corporation in 1984, followed by the sale of Exchange Oil & Gas in 1985. The company retained its specialty chemicals business, which continued to deliver good returns.

Hahn instituted a series of measures designed to get the company back on its feet. These included reviewing the health of its assets, improvementof cost controls and productivity, and continued investment in areas such as the pulp and paper business, which could insulate the company from future economic calamities and provide a hedge against cyclical upturns and downturns in the various industries in which the company operated. In 1984 Georgia-Pacific acquired a linerboard mill, several corrugated container plants, and over 300,000 acres of forest from St. Regis Corporation. It converted two paper plants to the production of higher-margin products, such as light-weight bleached board and white paper used by copiers and computer printers. It also successfully expanded a wood products mill in South Carolina and a plant in Florida to produce lattice and fencing materials, which were in heavy demand.

In 1986 the company entered another area of the paper market through the introduction of Angel Soft bathroom tissue. By the end of 1987 Georgia-Pacific’s tissue and towel operation, combined with its production of linerboard, kraft, and fine papers, enabled the company to achieve higher profitability in paper products than in wood products for the first time in its history, despite tough competition from major consumer products companies such as the Procter & Gamble Company.

Other elements of Hahn’s turnaround strategy included further decentralization of the company’s operations, which forced plant managers to compete with each other for capital funds, and the addition of several building materials distribution centers nationwide to capitalize on the growing trend toward remodeling and do-it-yourself projects.

During the last few years of the decade, the company made further acquisitions. These included U.S. Plywood Corporation and selected assets of the Erving Distributor Products Company in 1987, and Brunswick Pulp & Paper Company and American Forest Products Company in 1988. Its most controversial purchase, however, commenced in 1989 with an offer to buy Great Northern Nekoosa Corp of Connecticut, a competing producer of pulp, paper, containerboard, lumber, and plywood.

Originally incorporated in 1898 as the Northern Development Company but soon renamed Great Northern Paper Company, the predecessor to Great Northern Nekoosa had begun producing newsprint in 1900. By 1924 it was manufacturing corrugated paper and a decade later began a gradual transition from wrapping paper to business paper production. The company expanded its pulp and paper operations over the next 40 years.

In 1970 the Great Northern Paper Company and the Nekoosa Edwards Paper Company merged to become Great Northern Nekoosa Corporation. Great Northern Nekoosa acquired several firms subsequently to enhance the company’s manufacturing and distribution capabilities, including Heco Envelope Company in 1973; Pak-Well in 1975; Leaf River Forest Products in 1981; Barton, Duer & Koch, and Consolidated Marketing, Inc. in 1982; Triquet Paper Company in 1983; Chatfield Paper Company in 1984; J&J Corrugated Box Corporation and Carpenter Paper Company of Iowa in 1986; Owens-Illinois’s forest products company in 1987; and Jim Walter Papers in 1988.

Great Northern Nekoosa was a particularly attractive candidate for acquisition because of its depressed stock price. Georgia-Pacific saw the combination of the two companies as an opportunity to achieve economies of scale and other cost savings. In Hahn’s opinion the acquisition would enable Georgia-Pacific to add manufacturing capability at less expense than by building its own plants. On the other hand, Great Northern Nekoosa viewed Georgia-Pacific’s $3.74 billion bid as a hostile takeover attempt. It attempted to halt the proposed buyout with a series of lawsuits and an extensive search for another buyer. All of these measures failed, however, and the purchase was completed in March 1990. Georgia-Pacific assumed a significant amount of debt as a result, but was able to eliminate part of the burden through the subsequent sale of several mills and some timber-land to Tenneco, the John Hancock Mutual Life Insurance Company, and the Metropolitan Life Insurance Company.

With its hard-fought acquisition of Great Northern Nekoosa complete, Georgia-Pacific held market leadership positions in containerboard, packaging, pulp, and communication papers and was a major producer of related products, such as tissue, kraft paper, and bleached board. The most significant threat to the company’s continued growth would be the economy’s effects on its key business areas. Although the firm’s diversification into paper and pulp manufacturing was intended to help its survive cyclical downturns in lumber and housing construction, its new business areas were also highly cyclical in nature, with peaks and valleys lagging only months behind those occurring in lumber and housing.

Paper prices fell soon after Georgia-Pacific closed the Great Northern Nekoosa deal, but true to plan, the declining paper market was offset by record profits in the company’s building products division, which posted profits of $432 million in 1990 despite low levels in housing starts. Georgia-Pacific was also able to reduce a significant amount of the $8 billion debt it saddled through its Great Northern Nekoosa purchase, thanks to the company’s healthy cash flow. Despite these favorable signs, net income fell to $365 million in 1990, down from $661 million in 1989.

Prices of Georgia-Pacific shares on the New York Stock Exchange fell almost 50 percent in 1990 in response to investors” fears that the company might be acquiring too much debt. To ease this concern, the company took out a two-page ad in national magazines to convey the message that the company had significant cash flow to pay down its debt and had laid the groundwork for a strong future.

Despite Georgia-Pacific’s intentions, profits took a dive in 1991 when the bottom dropped out of both the building materials and pulp and paper markets. The company reported a net loss of $151 million, compared to profits of over $3 million the preceding year. Georgia-Pacific continued to rely on its substantial cash flow to pay shareholders and pay down its debt in 1991.

In 1991 the company also reorganized its building products division along product lines, as opposed to its previous method of management along geographical lines. It also completed the expansion of its Ashdown, Arkansas, paper mill with the addition of the world’s largest and fastest paper machine. A.D. (Pete) Correll, who joined Georgia-Pacific’s paper division in 1988 after being wooed from his position at the Mead Corporation, was elected president and chief operating officer.

Despite its continuously healthy cash flow and record-breaking profits in its building products division, the company posted losses again in 1992. In response to the recession, which continued to affect Georgia-Pacific’s key businesses, management chose to focus on keeping costs down and reducing debt in 1992.

Georgia-Pacific did this by paring down its “non-strategic” assets in early 1993, selling its Butler Paper distribution operations (acquired as part of its purchase of Great Northern Nekoosa) to Alco Standard Corporation and its roofing manufacturing business to GAP Corporation in March 1993. Proceeds of both sales, estimated at nearly $225 million, went to further reduce the company’s debt.

When Georgia-Pacific announced in January 1993 that Correll was to succeed Hahn as its chairman and CEO, the company’s financial outlook began to look brighter. Housing starts were on the rise again, and lumber production remained far below demand. Lumber prices had been rising to record highs since October, and industry analysts expect the growth to continue. Georgia Pacific had grown to become the largest supplier of building lumber in the United States and was perfectly poised to benefit from improvements in the economy.

The pulp and paper market, however, remained in a slump, causing some to question the wisdom of the Great Northern Nekoosa takeover. While Correll admitted that in the short term the purchase may not have seemed like such a good idea, he firmly believed that the investment would pay off substantially once paper industry cycles began to climb again. Demand for the company’s pulp and paper products is affected by the overall production capacity of the industry, as well as by economic factors such as currency exchange rates and conditions in foreign markets.

Principal Subsidiaries

American Forest Products Company; Ashley, Drew & Northern Railway Company; Brunswick Pulp & Paper Company; California Western Railroad; Fordyce and Princeton R.R. Company; G-P DISC, Inc.; Georgia-Temp. Inc.; Georgia-Pacific Export, Inc.; Georgia-Pacific Foreign Sales Corporation; Georgia-Pacific Leasing Corporation; Georgia-Pacific Paper Sales, Inc.; Gloster Southern Railroad Company; Great Northern Nekoosa Corporation; Hudson Pulp & Paper Corporation; Phoenix Athletic Club, Inc.; Saint Croix Water Power Company (Canada); The Sprague’s Falls Manufacturing Company; St. Croix Water Power Company; Superwood Corporation; Superior Fiber Products, Inc.; Thacker Land Company (57%); U.S. Plywood Corporation; XRS, Inc.

Georgia-Pacific Corporation

views updated May 21 2018

Georgia-Pacific Corporation

133 Peachtree Street, Northeast
Atlanta, Georgia 30303
U.S.A.
(404) 521-4000
Fax: (404) 521-4581

Public Company
Incorporated: 1927 as Georgia Hardwood Lumber Company
Employees: 60,000
Sales: $12.67 billion
Stock Exchanges: New York Tokyo

Georgia-Pacific Corporation is a leading manufacturer and distributor of building products, industrial wood products, pulp, paper, packaging, and chemical products. Although it owns or controls over six million acres of timberland throughout North America, the company did not hold title to a single tree for the first 24 years of its existence. Instead, Georgia Hardwood Lumber Company began operations in 1927 in Augusta, Georgia, as a hardwood lumber wholesaler with $12,000 in start-up funds provided by its founder, Owen Cheatham.

During its first decade in business, the company began lumber manufacturing in addition to its wholesaling activities. Cheatham focused on expanding the company’s milling capabilities in the southern United States, a strategy which allowed it to become the largest supplier of lumber to the U.S. Army during World War II. The company’s purchase of a plywood mill in Bellingham, Washington, in 1947 coincided with plywood’s growing popularity in the construction industry and gave the company a strong competitive advantage.

Additional plywood mills in Washington and Oregon were purchased in 1948, as well as another plywood plant in 1949, to support this growing business area.The company changed its name in 1948 to Georgia-Pacific Plywood & Lumber Company to reflect more accurately its geographic and operational expansion.

In 1951 the company changed its name to Georgia-Pacific Plywood Company. Cheatham gradually developed a reputation as an industry maverick. Over the next six years, he conducted a $160 million timberland-acquisition program in the western and southern United States. To finance this program, he borrowed heavily from banks and insurance companies expecting that the proceeds gained from the timber in the future would more than cover the required return on their investment. In order to be closer to these newly purchased resources, the company moved its headquarters from Georgia to Olympia, Washington, in 1953, and then again to Portland, Oregon, the following year.

Over the next decade, Cheatham used his financing model several times to acquire additional forest acreage and manufacturing facilities, including Coos Bay Lumber Company and Hammond Lumber Company in 1956. That same year, the company’s name was changed, for the third time since its founding, to Georgia-Pacific Corporation. Subsequent purchases, of Booth-Kelly Lumber Company in 1959 and W.M. Ritter Lumber Company in 1960, took the company to the number-three position in its industry.

The company’s unorthodox approach to growth was evident in other areas as well. It opened a kraft pulp and linerboard mill in Toledo, Oregon, in 1957 and its first resin adhesive plant at Coos Bay, Oregon, in 1959. The latter manufacturing operation was intended at first to supply the resin required for the company’s plywood-production business, but gradually grew large enough to supply resin to other plywood manufacturers as well. Georgia-Pacific was also one of the first manufacturers to use wood by-products rather than timber in pulp production. The company continued to pioneer in the development of plywood products, eventually shifting away from the traditional use of Douglas fir to a process using less-expensive southern pine. This wood previously had been considered inappropriate for use in plywood because of its high resin content.

During the 1960s Georgia-Pacific embarked upon another series of acquisitions, buying several lumber and paper companies across the country. These included Crossett Lumber Company in 1962; Puget Sound Pulp and Timber Company, Vanity Fair Paper Mills, St. Croix Paper Company, and Fordyce Lumber Company in 1963; Bestwall Gypsum Company in 1965; and Kalamazoo Paper Company in 1967. After building its first corrugated-container plant in Olympia, in 1961, the company added a series of additional manufacturing facilities for lumber, paper, and chemical products over the course of the rest of the decade.

Upon Cheatham’s death in 1970, Robert B. Pamplin, who had worked with Cheatham since the company’s inception, became chairman and chief executive officer. Although the company’s building-products business benefited from the housing boom of the early 1970s, its paper and pulp interests struggled due to low prices and sluggish demand. To bolster its manufacturing operations, the firm expanded production of two new building materials, polyvinyl chloride (PVC) and particle board, the former through a joint venture with Permaneer Corporation. Georgia-Pacific opened its own PVC manufacturing plant in 1975. When the cost of oil increased soon afterward, however, the company’s prices for its PVC-molding products proved to be too high to compete effectively with wood moldings, resulting in significant losses.

It was also during this period that the firm was required by the Federal Trade Commission (FTC) to defend its acquisition of 16 small firms in the South that supplied the company with 673,000 acres of the southern pine used to make plywood. Charging that the acquisitions tended to create a monopoly, the FTC issued a consent order in 1972 that forced Georgia-Pacific to divest 20% of its assets. This step resulted in the formation of a spin-off company called Louisiana-Pacific Corporation. The order also prohibited the firm from acquiring any other softwood plywood companies, and imposed restrictions on timberland purchases in the South for five years and on plywood mill acquisitions for ten years.

A slump in the housing industry in 1973 and 1974 depressed the company’s lumber and plywood business. Georgia-Pacific continued to post record profits, however, largely owing to growth in its chemical, pulp, and paper operations. These areas experienced slowdowns as well by the middle of the decade. Nevertheless, the company moved forward in its long-range program to increase manufacturing capacity across the board. It expanded through vertical integration into the production of additional chemicals derived from wood wastes, such as chlorine, phenol, and methanol. The 1975 acquisition of Exchange Oil & Gas Corporation enabled the company to become more self-sufficient by developing its own reserves of important raw materials required for the operation of its chemical plants.

In 1976 president Robert Flowerree succeeded Robert Pamplin as chairman and chief executive. A 25-year Georgia-Pacific veteran, Flowerree had been instrumental in taking the company into the chemical business. He was also considered to be more cautious than his predecessors. Under his leadership, the firm expanded its building products to include roofing materials, which it began to produce in a converted paper mill.

By 1978 the company was drawing three-quarters of its sales from the southern and eastern United States. This shift away from the West was instrumental in the decision to move the headquarters of the firm back to Georgia, 150 miles away from its original location, in Atlanta. The relocation caused many employees to leave the company, and several senior executives chose to retire rather than make the move. This shift left the firm vulnerable at a critical time, particularly in the growing chemical area.

The dawning of the 1980s brought with it another housing slump, but Georgia-Pacific was able to use its chemical business to maintain overall growth. Its plywood products, however, were slowly losing competitive ground to new and cheaper materials, such as waferboard and oriented-strand board, which were being manufactured and sold aggressively by such firms as Louisiana-Pacific and Potlatch Corporation. Until then, Georgia-Pacific had not placed significant emphasis on these materials, with only one plant producing waferboard and another producing oriented-strand board. Most of its capital expenditure was directed instead toward upgrading existing facilities and buying timberlands.

In 1982 T. Marshall Hahn Jr., who had succeeded Flowerree as president in 1976, became chief operating officer. When he became chairman and chief executive officer one year later, following Flowerree’s early retirement, he faced several serious problems. Demand for paper was strong, but in the area of higher-quality products, not in the basic linerboard and kraft paper sectors in which Georgia-Pacific concentrated. Although an upturn in the construction industry augured well for the company’s building-products business, the high interest rates on the debt the firm had used to fund expansion severely limited its freedom to take advantage of opportunities in that area. Furthermore, its chemical business, once the firm’s star division, fell on hard times as sales dropped significantly. This business was sold to Georgia Gulf Corporation in 1984, followed by the sale of Exchange Oil & Gas in 1985. The company retained its specialty chemicals business, which continued to deliver good returns.

Hahn instituted a series of measures designed to get the company back on its feet. These included reviewing the health of its assets, improvement of cost controls and productivity, and continued investment in areas such as the pulp and paper business, which could insulate the company from future economic calamities and provide a hedge against cyclical upturns and downturns in the various industries in which the company operated. In 1984 Georgia-Pacific acquired a linerboard mill, several corrugated container plants, and over 300,000 acres of forest from St. Regis Corporation. It converted two paper plants to the production of higher-margin products, such as light-weight bleached board and white paper used by copiers and computer printers. It also successfully expanded a wood-products mill in South Carolina and a plant in Florida to produce lattice and fencing materials, which were in heavy demand.

In 1986 the company entered another area of the paper market through the introduction of Angel Soft bathroom tissue. By the end of 1987 Georgia-Pacific’s tissue and towel operation, combined with its production of linerboard, kraft, and fine papers, enabled the company to achieve higher profitability in paper products than in wood products for the first time in its history, despite tough competition from major consumer products companies such as The Procter & Gamble Company.

Other elements of Hahn’s turnaround strategy included further decentralization of the company’s operations, which forced plant managers to compete with each other for capital funds, and the addition of several building-materials distribution centers nationwide to capitalize on the growing trend toward remodeling and do-it-yourself projects.

During the last few years of the decade, the company made further acquisitions. These included U.S. Plywood Corporation and selected assets of the Erving Distributor Products Company in 1987, and Brunswick Pulp & Paper Company and American Forest Products Company in 1988. Its most controversial purchase, however, commenced in 1989 with an offer to buy Great Northern Nekoosa Corporation of Connecticut, a competing producer of pulp, paper, containerboard, lumber, and plywood.

Originally incorporated in 1898 as the Northern Development Company and soon renamed Great Northern Paper Company, the predecessor to Great Northern Nekoosa had begun producing newsprint in 1900. By 1924 it was manufacturing corrugated paper and a decade later began a gradual transition from wrapping paper to business paper production. The company expanded its pulp and paper operations over the next 40 years. In 1970 the Great Northern Paper Company and the Nekoosa Edwards Paper Company merged to become Great Northern Nekoosa Corporation. Great Northern Nekoosa acquired several firms subsequently to enhance the company’s manufacturing and distribution capabilities, including Heco Envelope Company in 1973; Pak-Well in 1975; Leaf River Forest Products in 1981; Barton, Duer & Koch, and Consolidated Marketing, Inc. in 1982; Triquet Paper Company in 1983; Chatfield Paper Company in 1984; J & J Corrugated Box Corporation and Carpenter Paper Company of Iowa in 1986; Owens-Illinois’s forest products company in 1987; and Jim Walter Papers in 1988.

Great Northern Nekoosa was a particularly attractive candidate for acquisition, owing to its depressed stock price. Georgia-Pacific saw the combination of the two companies as an opportunity to achieve economies of scale and other cost savings. In Hahn’s opinion the acquisition would enable Georgia-Pacific to add manufacturing capability at less expense than by building its own plants. On the other hand, Great Northern Nekoosa viewed Georgia-Pacific’s $3.74 billion bid as a hostile takeover attempt. It attempted to halt the proposed buyout with a series of lawsuits and an extensive search for another buyer. All of these measures failed, however, and the purchase was completed in March 1990. Georgia-Pacific assumed a significant amount of debt as a result, but was able to eliminate part of the burden through the subsequent sale of several mills and some timberland to Tenneco, the John Hancock Mutual Life Insurance Company, and the Metropolitan Life Insurance Company.

With its hard-fought acquisition of Great Northern Nekoosa complete, Georgia-Pacific holds market leadership positions in containerboard, packaging, pulp, and communication papers, and is a major producer of related products, such as tissue, kraft paper, and bleached board. The most significant threat to the company’s continued growth is the economy’s effects on its key business areas. Although the firm’s diversification into paper and pulp manufacturing was intended to help it survive cyclical downturns in lumber and housing construction, its new business areas are also highly cyclical in nature, with peaks and valleys lagging only months behind those occurring in lumber and housing. Demand for the company’s pulp and paper products is affected by the overall production capacity of the industry, as well as by economic factors such as currency-exchange rates and conditions in foreign markets. Georgia-Pacific’s ability to forecast trends in demand, balance production accordingly, and compete both strategically and cost-effectively in its various businesses will be essential ingredients to its continuing success.

Principal Subsidiaries

American Forest Products Company; Ashley, Drew & Northern Railway Company; Brunswick Pulp & Paper Company; California Western Railroad; Fordyce and Princeton R.R. Company; G-P DISC, Inc.; Georgia-Temp. Inc.; Georgia-Pacific Export, Inc.; Georgia-Pacific Foreign Sales Corporation; Georgia-Pacific Leasing Corporation; Georgia-Pacific Paper Sales, Inc.; Gloster Southern Railroad Company; Hudson Pulp & Paper Corporation; Phoenix Athletic Club, Inc.; Saint Croix Water Power Company (Canada); The Sprague’s Falls Manufacturing Company; St. Croix Water Power Company; Superwood Corporation; Superior Fiber Products, Inc.; Thacker Land Company (57%); U.S. Plywood Corporation; XRS, Inc.; Great Northern Nekoosa Corporation.

Georgia-Pacific Corporation

views updated Jun 08 2018

Georgia-Pacific Corporation

founded: 1927

Contact Information:

headquarters: 133 peachtree st. ne atlanta, ga 30303 phone: (404)652-4000 fax: (404)230-7008 url: http://www.gp.com

OVERVIEW

Georgia-Pacific Corporation is one of the world's leading manufacturers and distributors of building products. The company is also a major force in the production of pulp and paper. In 1997 the company's net sales were $13.09 billion, up from 1996's $13.02 billion.

As of 1997 Georgia-Pacific was the number one U.S. producer of structural and other wood panels, and was number two in the production of lumber. Much of the company's wood production comes from its own property. In 1997 the company owned or controlled 6 million acres of timberland and Georgia-Pacific operated the second-largest gypsum wallboard company in North America. The company also controlled the world's largest building products distribution system in 1997, with 100 distribution centers across the country. Georgia-Pacific operates a growing specialty chemicals business based on its propriety technology in wood products resins and pulp- and paper-related chemicals.

In addition to building products, Georgia-Pacific's other major business segment is pulp and paper production. In 1997 the company had the capacity to produce 9.4 million tons of pulp, paper, and paperboard. The company produced containerboard and packaging, communications papers, market pulp, and tissue.

To improve its competitive position, Georgia-Pacific invested $3.5 billion in capital projects and acquisitions between 1994 and 1996, primarily in building products facilities. This was $2-billion more than the investment required for maintenance and environmental compliance, according to the company.

COMPANY FINANCES

The corporation reported consolidated net sales of $13.1 billion and net income of $69 million for 1997, compared with net sales of $13.0 billion and net income of $156 million for 1996. Georgia-Pacific's building products division's net sales of $7.5 billion were up slightly from $7.4 billion the previous year. Sales in its pulp and paper division of $5.6 billion were the same as 1996, but operating profits of $174 million were down from $390 million in 1996. These declines were driven by higher wood costs in the company's manufacturing business, lower average lumber prices, and continued losses in its distribution division. The total debt for Georgia-Pacific Corporation, including both Georgia-Pacific Group and The Timber company, was $5.5 billion at the end of 1997.

Georgia-Pacific set a goal in 1996 of improving earnings by approximately $400 million by reducing overhead costs and improving efficiencies. In 1997 the corporation said it had achieved about $219 million in reductions, about half of its goal.

Georgia-Pacific stock ranged from a low of $70 to a high of $108 through December 16, 1997, when the company reorganized. Over the past five years the stock has traded from a low of $48 to a high of $108. On December 17, 1997, the new Georgia-Pacific Group began trading at $60 and in April 1998 it was selling at $66. The Timber Company opened at $26. Georgia-Pacific stock's price-earnings ratio estimate for 1998 was 15.4. Earnings per share in 1997 were $2.26.

ANALYSTS' OPINIONS

Market analysts note that the financial performances of forest products companies such as Georgia-Pacific tend to be highly cyclical. When prices for paper and wood products are high, so are company sales and profits. When those prices are low, the opposite occurs.

An April 1998 report by The Value Line Investment Survey noted that Georgia-Pacific should show improvement in 1998 due to its cost containment efforts and a strengthening of commodity prices. However, the spinoff of The Timber Company may "increase volatility," the report said, since the "G-P Group is unable to rely on cash flow from G-P Corp.'s timber operations during tight periods. But the company may benefit from a more rational capital spending policy."

A January 1998 stock report by Standard & Poor's remains "neutral" on Georgia-Pacific's shares. The report looks favorably on the company's move to separate its timber business and the modest upturn in paper and packaging, but is cautious about slowing wood markets.

HISTORY

The company now known as Georgia-Pacific was founded as a hardwood lumber wholesale company in Augusta, Georgia, by Owen Cheatham in 1927. By 1938 the company also operated five sawmills in the southern United States. The company moved into the northwest U.S. market in 1947 when it purchased a plywood mill in Bellingham, Washington. In the 1950s the company purchased large tracts of land that provided a base of timberlands for wood production—by 1960 the firm owned 1 million acres of timberland. In 1954 the company moved its headquarters to Portland, Oregon, and in 1957 changed its name to Georgia-Pacific. That same year, it established a presence in the pulp and paper industry by building a new mill in Toledo, Oregon.

FAST FACTS: About Georgia-Pacific Corporation

Ownership: Georgia-Pacific Corporation is a publicly owned company traded on the New York Stock Exchange under its "letter" stocks, Georgia-Pacific Group and The Timber Company. Georgia-Pacific options are traded on the Philadelphia Stock Exchange.

Ticker symbol: GP (Georgia-Pacific Group) and TGP (The Timber Company)

Officers: Alston D. "Pete" Correll, Chmn., CEO, & Pres., 57, $1,050,000; Donald L. Glass, Exec. VP-Timber / Pres., & CEO, The Timber Company, 48, $455,600; John F. McGovern, Exec. VP-Finance & CFO, 50, $540,500

Employees: 46,500

Chief Competitors: Georgia-Pacific Corporation's primary competitors are: Boise Cascade Corporation; Bowater Incorporated; Champion International Corporation; Consolidated Papers, Inc.; Fort James; International Paper; Kimberly Clark; Mead; Owens Corning; Procter & Gamble; Stone Container; Union Camp; USG; and Weyerhaeuser.

In the 1960s Georgia-Pacific purchased several forest products companies and also invested in new facilities. As a result, the company was able to move into new lines of business, such as containers, paperboard, tissue, and chemicals. By 1972 the company had grown so large that the U.S. Federal Trade Commission forced it to sell 20 percent of its business assets.

In the 1970s Georgia-Pacific continued to develop its chemical business and introduced inexpensive substitutes for plywood, such as waferboard. In 1979 the company purchased Hudson Pulp and Paper, and in 1982 moved its headquarters to Atlanta.

In 1988 Georgia-Pacific purchased Georgia-based Brunswick Pulp and Paper and its extensive southern timber holdings. In 1990 the company made another major acquisition with its purchase of Great Northern Nekoosa for $3.74 billion. The purchase, which was initially opposed by Great Northern, greatly increased Georgia-Pacific's pulp and paper production capacity but also increased its debt load. To pay off some of that debt, the company sold $1 billion in assets in 1990, including 19 container plants and more than 500,000 acres of timberland.

In 1991 Georgia-Pacific sold a large portion of its interest in Great Northern Paper to Bowater Incorporated. In 1996 the company made a major move to increase its position in the gypsum market by purchasing nine wall-board plants from Domtar Incorporated for $350 million.

In December 1997 Georgia-Pacific instituted a fundamental change in the way it does business. The company reorganized as two independent units to separate the performance and cash flows of Georgia Pacific's timber business from its manufacturing and distribution divisions. The corporation's existing common stock was redesignated as Georgia Pacific Group, representing Georgia-Pacific Corporation's pulp, paper, and building products businesses. The Timber Company was created to represent Georgia-Pacific Corporation's timber holdings. Georgia-Pacific issued stock in the newly formed Timber Company and the newly named Georgia-Pacific Group, which trade independently on the New York Stock Exchange.

STRATEGY

In 1995 Georgia-Pacific Corporation began to use a new operating standard called EVA, the acronym for "economic value added." EVA is a plan for measuring a company's performance and compensation plan. EVA measures a company's progress in economic terms by making sure that management's goals are synchronized with its shareholders' financial objectives. Rather than measure a company's financial success by its level of production or assets, EVA gauges a company by its capacity to produce real after tax profits.

To improve its EVA ratings, Georgia-Pacific's goal in 1995 was to streamline its work processes by establishing precise operating targets and incentives for its management team. The company also planned to "aggressively control costs."

Several strategies came into play when Georgia-Pacific Corporation separated its timber business into a new operating group, The Timber Company, in 1997. From an investment standpoint, the company claims the move should allow The Timber Company stock to be valued higher because of its stable, growing cash flows. Before the split, cash flows from timber operations were redirected into low return investments in plant and equipment. These cash flows can now be paid directly to shareholders in the form of share repurchases.

In addition to investor benefits, the company sees clearer timber pricing as a benefit of the separation of the two companies. The Timber Company supplied 83 percent of its output to the Georgia-Pacific Group in 1998, and its prices were based on an average of The Timber Company's outside sales and Georgia-Pacific Group's own purchases from other suppliers.

Finally, the separation allows company managers the flexibility to make financial and strategic decisions for their own businesses independently, giving them greater responsibility and accountability for the performance of their company.

CHRONOLOGY: Key Dates for Georgia-Pacific Corporation

1927:: Owen Cheatham opens the Georgia Hardwood Lumber Company in Augusta, Georgia
1948:: Changes the company name to Georgia-Pacific Plywood & Lumber Company
1951:: Name changes again to Georgia-Pacific Plywood Company
1956:: Name changes once again to Georgia-Pacific Corporation
1960:: Georgia-Pacific becomes the number three company in the industry
1972:: Georgia-Pacific is ordered to divest 20 percent of its interests
1987:: Paper products becomes more profitable than wood products for the company for the first time
1990:: Purchases Great Northern Nekoosa Corp.
1997:: Reorganizes as two independent units of timber divisions and manufacturing and distributing divisions

A three-year investment program, totaling $3.2 billion, was undertaken by Georgia-Pacific from 1994 to 1996. These investments in property, plants, and equipment have been reduced to $750 million annually and the company expects to continue this level of investment for the foreseeable future. Georgia-Pacific says it limits its investments either to businesses with higher returns, such as gypsum and tissue, or to projects that dramatically lower costs or improve efficiency. In 1997 The Timber Company invested $51 million in timber and timberlands. The company says it is committed to maintaining its annual investment at approximately $50 million.

INFLUENCES

Both of Georgia-Pacific's primary businesses are highly cyclical in that prices for building products and pulp and paper tend to rise and fall sharply based on supply and demand. The company's building products business is affected primarily by the level of U.S. housing starts; the level of repairs, remodeling and additions; commercial building activity; the availability and cost of financing; and changes in industry capacity. The performance of the company's pulp and paper business depends on national and international demand for its products, production capacity levels at Georgia-Pacific and its competitors, and the levels of product inventory carried both by the company and its customers. Also, Georgia-Pacific Group's earnings are especially volatile because it manufactures a significant percentage of the worldwide volume of several key products. When prices fluctuate, even in a minor way, Georgia-Pacific's operating income is influenced significantly.

According to the company's annual report, 1997 saw a 10-percent increase in lumber prices as well as a 10-percent increase in gypsum prices. On the other hand, prices for oriented strand board were 22 percent lower. Although average timber prices have remained stable since 1996, prices for hardwood and softwood timber used to make lumber and plywood have increased. Georgia-Pacific expects prices it pays for timber and wood fiber to increase over the foreseeable future.

The Asian economic crisis that began in October 1997 impacted the world pulp market by the end of the year. Orders from Asia dropped sharply, which combined with low pulp and paper prices, forced the company to take 165,000 tons of downtime between October 1997 and April 1998.

CURRENT TRENDS

Reorganization, restructuring, and cost reduction are three key trends for Georgia-Pacific in a three-year effort to improve efficiency throughout the corporation. The separation of the company's timber business from its other operations reflects an effort to make it an independent profit center for management purposes and to make its value more apparent to investors.

The company's restructuring efforts have been felt in all divisions of Georgia-Pacific. To reduce costs in its distribution division, the company sold 13 of its 70 distribution centers in 1998. These closings resulted in a loss of 1,500 of its 5,100 distribution-area employees. The company also announced plans to sell 8 of its 9 major millwork-fabrication plants, which assemble doors, windows, and similar products. Reducing overhead, cutting administrative expenses, and reassessing "administrative activities to eliminate nonessential work and related salaried positions," according to Georgia-Pacific's annual report, are ongoing efforts in the company's cost reduction drive.

Using technology in managing its timber business is one way Georgia-Pacific is facing the Information Age. Developed over a three-year period and at a cost of about $6 million, the Integrated Forest Management System involves Georgia-Pacific's proprietary computerized models, which provide information for planning and financing The Timber Company's forest resources. These computerized models project growth from the forest and predict future inventory estimates based on various management and harvesting scenarios. Georgia-Pacific says that this system will be used on all company properties by the end of 1998.

PRODUCTS

Georgia-Pacific is the largest manufacturer and distributor of building products in the United States. The Georgia-Pacific Group produces wood panels, lumber, gypsum products, chemicals, and other products at 150 facilities in the United States and 7 in Canada. Accounting for 20 percent of domestic production, the company's wood panels include plywood, OSB (oriented strand board) panels, hardboard, particleboard, panelboard, soft-board, decorative panels, and medium-density fiberboard.

Annually the Georgia-Pacific Group manufactures 2.7 billion board feet of lumber. The Group's 39 mills make lumber products from southern pine, a variety of Appalachian and Southern hardwoods, cypress, redwood, cedar, spruce, hemlock, and Douglas fir.

The gypsum products manufactured by Georgia-Pacific are wallboard, Dens specialty panels, fire-door cores, industrial plaster, and joint compound. The Group is also the leading supplier of wood resins, adhesives, and specialty chemicals.

In the pulp and paper business, Georgia-Pacific Group produces container-board and packaging, corrugated containers, kraft paper, communication papers, market pulp, and tissue. Its growing tissue products business makes napkins, bath tissue, and paper towels, marketed under the consumer brand names Angel Soft, Sparkle, Coronet, MD, and Delta. Communication paper, also known as uncoated free-sheet, is used in office copy machines and commercial printing, business forms, stationery, tablets, books, envelopes, and checks.

Georgia-Pacific's six mills make it the world's second-largest market pulp producer. Wood pulps are used in the manufacturer of many paper grades. Fluff pulp is used for disposable diapers and other sanitary items.

The Timber Company, created in 1997 to manage Georgia-Pacific Corporation's timber assets, grows and sells timber and wood fiber. It sells softwood sawtimber, softwood pulpwood, hardwood sawtimber, and hard-wood pulpwood to the Georgia-Pacific Group and other industrial wood users.

CORPORATE CITIZENSHIP

As a forest products company that cuts trees to produce its primary products, Georgia-Pacific has to manage the ongoing controversy that surrounds the use of forest resources. The company has responded by developing a comprehensive environmental policy.

In the mid- to late 1990s, Georgia-Pacific was using a set of principles to guide its environmental stew-ardship efforts. These 18 principles covered 4 main areas including management focus, conservation and sustainable use of resources, protection of health and the environment, and community awareness. The company was also participating in the Sustainable Forestry Initiative (SFI), sponsored by the American Forest & Paper Association, an industry trade group. The SFI established broad forest principles and detailed guidelines for managing forest lands for the future.

In addition to complying with its own environmental rules, in the mid-1990s Georgia-Pacific was providing assistance to its private timber suppliers to help them responsibly manage their land holdings. This company-wide forest management assistance program, called MAP, included reforestation of harvested timber stands and the use of best management practices (BMPs) to help protect water and soil quality during harvesting and re-planting operations. One example of a BMP is the creation of buffer zones that limit tree harvesting close to lakes, rivers, and streams.

Georgia-Pacific has also worked with non-profit groups to manage and protect ecologically sensitive land. For example, through a cooperative effort announced in January 1997, The Nature Conservancy's North Carolina Chapter and Georgia-Pacific worked to restore longleaf pine forests and manage 21,000 acres of southeastern coast forest lands along North Carolina's lower Roanoke River. Georgia-Pacific helped the Conservancy's staff in Wilmington, Delaware, create a 20-year forest management plan for these properties through the MAP program. In 1993 Georgia-Pacific signed an agreement with the U.S. Fish and Wildlife Service to conserve the habitat of the red-cockaded woodpecker on its timberlands. Other wildlife that has become a focus of Georgia-Pacific's protection programs are spotted owls, gopher tortoises, bald eagles, and many rare plants.

In 1995 Georgia-Pacific introduced its Environmental Excellence Awards to recognize the company's environmental successes and to encourage ongoing progress. The 1996 awards recognized 20 finalists in the categories of pollution prevention, community service, scientific research and technological innovation, and the Chairman's Award for Environmental Excellence.

GLOBAL PRESENCE

Georgia-Pacific derives most of its sales in the United States. It had a relatively small but growing position in international markets in the mid- to late-1990s. Sales to foreign markets in 1997 made up 8 percent of company sales.

The majority of the market pulp the company produces is exported. (Market pulp, used to make paper, is pulp that is sold on the open market. Pulp produced and used by the same company is not considered market pulp.) As of 1997 the company produced market pulp at six mills with a combined annual capacity of 2.1 million tons. The group exports approximately 65 percent of its market pulp, primarily to Europe, Asia, and Latin America.

EMPLOYMENT

A hiring freeze on salaried employees and a voluntary early retirement program were among the cost-cutting measures instituted by Georgia-Pacific in 1997. The company also began a reassessment of its administrative activities to eliminate nonessential positions. In addition, in late 1997 the company sold or closed a number of its distribution centers and its millwork fabrication facilities nationwide, causing approximately 1,500 employees to loose their jobs.

In May 1998 the company listed openings for experienced professionals in the fields of engineering, finance and accounting, information systems and sales, marketing, and distribution. In addition, Georgia-Pacific recruits for entry level, co-op, and intern positions. Candidates seeking temporary or supplemental jobs are referred to Georgia TEMP, Inc., a wholly owned subsidiary of Georgia-Pacific Corporation, which provides administrative and information systems professionals to Georgia-Pacific's Atlanta headquarters, as well as other Atlanta-area companies.

Among the benefits offered to salaried employees are several different options for health care plans, as well as life insurance, a retirement plan, stock purchase plans, paid holidays and vacations, an educational assistance program, a credit union, and a matching gift program.

SOURCES OF INFORMATION

Bibliography

"alston d. correll of georgia-pacific." corporate america's most powerful people, 1997, 21 may 1998. available at http://www.forbes.com.

"facilities to be sold, staff to be cut in restructuring." the wall street journal, 15 january 1998.

fisher, anne. "danger zone." fortune, 8 september 1997.

"georgia-pacific." forbes 50th annual report on american industry, 1998, 1 january 1998. available at http://www.forbes.com.

"georgia-pacific." hoover's handbook of american business 1998. austin, tx: the reference press, 1997.

"georgia pacific." standard & poor's stock reports. new york: standard & poor's, 10 january 1998.

"georgia-pacific to split up interests in timber and paper." new york times, 18 september 1997.

russo, david a., and others. "paper & forest products industry." the value line investment survey (part 3 - ratings and reports), 16 january 1998.

sharav, ben. "georgia-pacific gp." value line investment survey, 17 april 1998.

For an annual report:

telephone: (404)652-5555 or write: investor relations, georgia-pacific corp., po box 105605, atlanta, ga 30348

For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. georgia-pacific's primary sics are:

2411 logging

2421 sawmills and planing mills, general

2426 hardwood dimension and flooring mills

2435 hardwood veneer and plywood

2611 pulp mills

2621 paper mills

2631 paperboard mills

2653 corrugated and solid fiber boxes

2657 folding paperboard boxes

2861 gum and wood chemicals

Company Profiles for Students

Georgia-Pacific Corporation

Georgia-Pacific Corporation

Early Decades of Geographic and Operational Expansion

Struggles in the 1970s

Company Perspectives:

Turnaround in the 1980s

Key Dates:

Early to Mid-1990s: Acquisition of Great Northern Nekoosa and Cost-Cutting Initiatives

Late 1990s into Early 21st Century: Enter Fort James, Exit Timber

Principal Subsidiaries

Principal Competitors

Further Reading

Georgia-Pacific Corporation

Georgia-Pacific Corporation

Principal Subsidiaries

Further Reading

Georgia-Pacific Corporation

Georgia-Pacific Corporation

Principal Subsidiaries

Further Reading

Georgia-Pacific Corporation

Georgia-Pacific Corporation

Contact Information:

OVERVIEW

COMPANY FINANCES

ANALYSTS' OPINIONS

HISTORY

FAST FACTS: About Georgia-Pacific Corporation

STRATEGY

CHRONOLOGY: Key Dates for Georgia-Pacific Corporation

INFLUENCES

CURRENT TRENDS

PRODUCTS

CORPORATE CITIZENSHIP

GLOBAL PRESENCE

EMPLOYMENT

SOURCES OF INFORMATION

Bibliography

For an annual report:

For additional industry research:

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