Lumber prices help boost numbers at Weyerhaeuser
Wood products producer Weyerhaeuser reported net earnings of $99 million for its first fiscal quarter, which ended March 31. Excluding an after-tax gain of $96 million on a timberland sale in Southwest Washington, the company’s profit for the quarter was $3 million. This compares with a net loss of $20 million for the same quarter in 2010.
First-quarter net sales were $1.57 billion, a 10.5% increase over $1.42 billion in the first quarter of 2010.
Weyerhaeuser’s wood products business, which produces lumber, plywood, oriented strand board (OSB) and engineered wood products, posted sales of $624 million in the first fiscal quarter, compared with $572 million in the fourth quarter of 2010. The company attributed the increase to a rise in selling prices across most product lines. Per unit manufacturing costs declined due to continued cost reductions and improved operating rates for lumber and oriented strand board. This was partially offset by increased log costs.
The company’s real estate business, which includes its home-building operation, posted $160 million in sales for the quarter, down from $305 million in the fourth quarter of 2010. Net income was $1 million, compared with $6 million in the proceeding quarter. Home sale closings decreased 40% compared with the fourth quarter to 363 single-family homes.
Trex acquires steel decking company
Trex Co., a leading manufacturer of composite decking, has acquired the assets of Iron Deck Corp., a manufacturer of steel deck framing systems based in Denver. Trex said it will now manufacture and market a new steel deck framing product called Trex Elevations at its Fernley, Nev., and Winchester, Va., facilities.
Trex Elevations will be manufactured of dual-coated, galvanized steel; 25% of the steel is recycled material, and any excess materials from a job site are 100% recyclable. The material is easy to cut and easy to build, according to Trex. The product offers a 25-year limited warranty.
"This product line extension will allow us to continue gaining market share in the rapidly growing ultra low-maintenance category, while positioning our brand for strategic expansion into the $1.9 billion deck substructure market,” said Ron Kaplan, chairman, president and CEO of Trex. “Composite materials are increasingly taking share from wood decking and railing, and we see the same opportunity for significant market penetration against wooden deck substructures with the introduction of Trex Elevations.”
Seeing the forest for the trees
ForestEthics, a hard-hitting environmental group that is running a campaign to protect endangered forests, has kept the Sustainable Forestry Initiative (SFI) organization in its crosshairs for the last several years. The forest industry’s largest certification program for wood products even has its own tab on the ForestEthics Web page: Viewers can click on “Stop SFI GreenWash” and read a critique of the group’s certification process, its membership, its nonprofit status and even its logo.
The campaign really heated up last fall after lawyers for ForestEthics filed administrative complaints with the Federal Trade Commission and the Internal Revenue Service, challenging both the marketing claims and the nonprofit status of the SFI program. (No action was taken by either federal agency, according to SFI.) In November 2010, ForestEthics also published a report, “SFI: Certified Greenwash,” attacking the organization’s auditing process.
SFI responded with a point-by-point refutation of the charges, claiming that ForestEthics was trying to create a monopoly for the Forest Stewardship Council (FSC), a rival organization that also certifies wood products. SFI and FSC often use the same, third-party independent agencies to conduct audits, SFI pointed out. It really took ForestEthics to task for using a photo of a barren mountainside in Washington State to illustrate SFI-sanctioned clear-cutting. The land had been eroded by a landslide caused by record rainfall, SFI said.
As it turns out, both sides were just warming up for another big clash this spring. On March 28, ForestEthics sent out a press release stating that seven major companies, including Aetna, Allstate and Office Depot, have committed to phasing out SFI-approved paper and packaging in their offices, operations and catalogs.
SFI contacted all the companies and sent out a press release entitled, “What to Do When ForestEthics Comes Knocking?” Kathy Abusow, SFI’s president and CEO, urged companies to resist “pressure tactics” from ForestEthics to remove the SFI label from their products.
“ForestEthics is threatening customers, conservation organizations and others,” Abusow told Home Channel News. “Guilt, pressure and misinformation are not the ingredients that drive sustainability.”
Abusow’s defense of her organization was backed up by six conservationists who serve on the SFI board. In an “open letter” sent to the media on April 7, executives with Bird Studies Canada, Theodore Roosevelt Conservation Partnership and other various environmental groups talked about the work they do with SFI to sustain fish and wildlife, biodiversity and water quality. “The six of us have dedicated our lives to conservation,” they wrote. “We would not be on the SFI board if we did not believe it is a credible forest certification program.”
ForestEthics is now conducting an email campaign focused on the six conservationists, whom it says have been offered “token spots on the [SFI] board to boost … its eco-cred.” The group did not respond to a request for comments.
Ken Dunham, president of the Lumber Association of California & Nevada (LACN), has members who produce, distribute and sell both FSC and SFI lumber. Some of his LBM dealers are among the earliest FSC-certified lumberyards.
“The dealers are in the business of trying to avoid conflict and sell products,” Dunham said. “But they’re choosing based on market demand.”
ForestEthics picketed the LACN’s annual convention in 2007; their target that year was Sierra Pacific Industries, a lumber producer based in Redding, Calif. After speaking with the protestors, Dunham said he realized the gulf between both sides.
“They don’t see trees as a crop, something to be harvested and replanted,” Dunham said. Meanwhile, his members are knowledgeable about SFI and FSC’s forest management practices. “They know that nobody who harvests trees leaves the forest a mess anymore,” he said.