Stimson Lumber Company Inc. - Company Profile, Information, Business Description, History, Background Information on Stimson Lumber Company Inc.

520 S.W. Yamhill Street, Suite 700

Company Perspectives

One of the most valuable assets of Stimson Lumber Company is its forestlands. The primary purpose of these lands is to provide high quality harvestable timber on an economical basis through sustainable forestry practices. Sustainable forestry means managing our forests to meet the needs of the present without compromising the ability of future generations to meet their own needs. This is done by practicing a land stewardship which integrates the growing, nurturing, and harvesting of trees for useful wood products with the conservation of soil, air and water quality and fish and wildlife habitat.

History of Stimson Lumber Company Inc.

Stimson Lumber Company Inc. is one of the oldest forest products companies in the United States. With about 500,000 acres of timberland in the western states, the company has manufacturing operations at 14 locations in Idaho, Montana, Oregon, and Washington. Products include dimension lumber, boards, posts, plywood, hardboard paneling, siding, and decking made from fir, pine, and cedar. Stimson Lumber Company is a participant in the American Forest Products and Paper Association's Sustainable Forestry Initiative program.

Staking a Claim in Timber in the 19th Century

In 1850, Thomas Douglas (T. D.) Stimson and a business partner staked a 40-acre logging claim in Michigan and began a successful logging business there together. After the two parted ways several years later, Stimson continued to acquire timberlands on his own, to establish lumber camps, and to sell logs to mills in Muskegon, Michigan. He left his business to pursue a career in mining when oil was discovered across the border in Canada, and by 1864, he had lost everything he had.

A determined man, Stimson returned to logging in the second half of the 1860s, and by 1871 he had acquired enough acreage in northern Michigan to establish his own mills, which he equipped with modern steam-powered machinery. In 1873, Stimson incorporated the company as Stimson Clark Manufacturing Company. By the early 1880s, Stimson's business was the third largest mill operation in Muskegon, Michigan. In 1885, he moved to Chicago, leaving management of the business to his sons. However, the increasingly poor quality of timber and worker unrest in the Midwest led him to travel westward again in search of timberland for further growth. In 1888, he set out with his sons, sailing up the Columbia River to Portland and on to the Puget Sound. They explored the backwoods for weeks, impressed by the quality of the timber and the density of tree growth. By November, the men had arrived in Seattle, a saltwater port that assured a continuous market for lumber.

Stimson decided to move his business to the Pacific Northwest and sent two of his sons, Willard Horace and Charles Douglas, ahead to acquire timberlands there in 1889. Willard purchased acreage in Snohomish County, on Hood Canal, in the area around Tillamook, Oregon, and in California. Charles bought a sawmill in Ballard, Washington. In January 1890, the Stimson Mill Company incorporated in Ballard and within a month was processing lumber, laths, and shingles. Within a few years, the Stimson Mill Company was on its way to becoming the largest and most modern mill in the Seattle area. In 1892, when demand for lumber slowed, Charles looked south to California to sell the company's excess capacity.

Willard Horace took over the business after his father died in 1898, the year in which Charles Willard, Stimson's grandson, also joined Stimson Lumber, and soon showed his acumen for tough negotiating. By 1912, Charles Willard led the company in the sale of the Ballard mill and moved Stimson Mill Company's operations to Hood Canal to log surrounding timberlands. In 1923, he purchased one of the oldest mills in Seattle, the Brace-Hergert Mill. The mill became known as the Stimson Lumber Company; it employed more than 200 men and produced about 50 million feet of fir lumber annually.

Surviving Setbacks in the First Half of the 20th Century

However, by 1929, the area around Hood Canal had been cleared of quality timber, and the company faced its second move--this time to the Tillamook Region of western Oregon to make use of 25,000 acres of old growth forest that T. D. Stimson had purchased. During the period from 1929 to 1981, the company reinvested in timberland holdings and diversified its product line. Harold Miller, Charles' son-in-law, led the Stimson Lumber Company in building a state-of-the-art sawmill in Forest Grove and in remaining viable in an increasingly competitive market.

Throughout the Great Depression, Stimson Lumber never shut its mills or laid off workers. Even the fires in western Oregon during the 1930s and 1940s, the "Tillamook Burn," did not halt its growth, and in the mid-1940s, the company began making hardboard or "sandalwood" out of its burned, cracked, and stained green wood through its Stimson Forest Fiber Products subsidiary. Hardboard is a product similar to particleboard, used for paneling and floors.

By the late 1940s and early 1950s, resource shortages led to more acquisitions again--of related businesses as well as tracts of timberland. Stimson Lumber bought up parcels ranging in size from a few to 1,000 acres in Columbia, Clatsop, and Yamhill counties in Oregon and in Clark County in Washington. A 10,000-acre purchase of redwood timberland in Del Norte County, California in the 1950s led to the establishment of Miller Redwood Company as a subsidiary.

In 1962, the company extended its reach yet further when it purchased Northwest Petrochemical Company in Anacortes, Washington, a company that manufactured phenol, a chemical used in processing hardboard. Northwest Petrochemical later supplied the phenol used in Stimson Lumber Company's plywood plant in Merlin, Oregon, which it purchased in 1976. In the mid-1960s, Miller waged a hearty battle against the Johnson administration to keep the company's redwood holdings out of a proposed national park with the support of then-governor Ronald Reagan. In the end, those in charge shifted the park boundaries, and Miller ceded only a few thousand acres.

Modern Concerns: 1980-2000

The 1980s were a decade of growing shortages of raw materials for the lumber products industry, stemming in part from the export of logs to Far East. The company continued on its path of acquisitions. In 1980, Miller led the company's largest purchase to date--almost 28,000 acres in the Grand Ronde region in western Oregon--leaving it with total holdings of almost 70,000 acres. After Miller died in 1981, company leadership passed to Darrell Schroeder, an employee who had been with the company since 1946. Under Schroeder, the company continued to expand steadily, building a dimension mill in Forest Grove and acquiring a heavy timber mill in Clatskanie and a cutting mill in Oregon City. However, despite its acquisitions, Stimson felt the pressure of shortages, and, in 1988, shut down the second shift at its Clatskanie mill.

In 1990, the spotted owl came under the protection of the Endangered Species Act, and tensions between environmentalists and those in the lumber business really began to heat up. The owl's endangered species status put thousands of acres of federal land in western Oregon off limits to harvest and led to inflated timber prices. At the same time, fewer housing starts resulted in a sagging lumber and plywood market. The timber industry as a whole embarked on a roller coaster ride; while prices rebounded briefly at the start of 1993, they soon after tumbled rapidly. As a result, there were 36 mill closures in the Pacific Northwest in 1992, and 27 in 1993. After Dan Dutton succeeded Schroeder as head of Stimson Lumber Company in 1991, the company, which employed about 2,000 in five states, closed an old-growth-dependent sawmill in Oregon City.

Stimson also made the decision to increase its land base as a means of assuring a stable supply of logs for its sawmills, and, by 1993, had increased its timberland holdings from about 80,000 acres to about 120,000. In addition, the company improved its mills and invested more in thinning and fertilizer as a means of growing more timber in a relatively short period of time. As a result, by 1993, only 36 million board feet of Stimson's raw materials came from public lands under contract for logging, down two-thirds from 1989. In 1996, it purchased another 107,000 acres from Plum Creek in northeast Washington and north Idaho in the Colville National Forest.

The company also pursued an active course of manufacturing acquisitions. In 1994, it bought Champion International Corporation's manufacturing facilities at Bonner and Libby, Montana--three lumber mills and two plywood operations, including one of the world's largest plywood mills. The 1996 Plum Creek purchase added another mill in Colville, Washington. By the end of the 1990s, Stimson owned a mill at Clatskanie, Oregon, two sawmills and a hardboard plant at Forest Grove, Oregon, a plywood plant and stud mill in Bonner, Montana, a plywood plant at Libby, Montana, and about 290,000 acres in four northwestern states and northern California. It employed about close to 2,000 people.

2000 and Beyond

In 2000, Stimson Lumber bought Idaho Forest Industries of Coeur d'Alene, bulking up its acreage by another 90,000 and gaining three mills in an area where it already operated five mills. Crown Pacific sold all of its Montana land to Stimson--16,500 in northwest Montana--bringing Stimson's holdings to more than 400,000 acres. That same year, at the request of Home Depot, Stimson's largest customer, all of its forestlands and its log procurement program underwent a rigorous independent third-party review for compliance with the sustainable forestry initiative program standards. "We have a heartfelt view of the land," Andrew Miller, who became company president in 2000, asserted in a 2000 Spokesman-Review article of that year. He added, "Timberland is a multi-generational investment. Some of the property we're logging for the third time."

However, the company went head-to-head with environmentalists when it sued for road access to the land in Idaho it had purchased from Plum Creek, which was surrounded by the LeClerc grizzly bear management area in the Selkirk Mountains of the Colville National Forest. According to the Alaska Native Lands Conservation Act and Forest Service regulations, the agency must provide roads to private lands within National Forest boundaries. The Plum Creek land, according to environmentalists, was within area was critical to recovery of grizzly bears, caribou, lynx, and bull trout.

The U.S. Forest Service decided to allow the company to build or reopen almost three miles of road in the Colville National Forest in 2001. Stimson insisted it would mitigate the impacts of its logging on wildlife by limiting the size of cuttings and cutting only at certain times of year. The non-profit Defenders of Wildlife petitioned the Fish and Wildlife Service to designate the area critical habitat, while the Sierra Club sued the Forest Service and the U.S. Fish and Wildlife Service in federal court.

In a more positive exchange also that year, Stimson sold nearly 25,000 acres of redwood land in California to Save-the-Redwoods League, its Mill Creek property, containing 125 acres of old growth redwood, home to several endangered species of fish. Andrew Miller in San Jose Mercury News in 2001 said of the sale, "The trend going forward in California for resource businesses is only getting more challenging and negative. Oregon and Washington have less bureaucracy and fewer costly citizen lawsuits." Elsewhere in the San Francisco Chronicle that year, Miller called the land an "ecological crown jewel" because it connected "the national park with the state park, both beautiful old-growth parks, and connects the Pacific Ocean with the U.S. Forest Service land."

Meanwhile domestic lumber prices were falling in the face of competition from Canadian woods suppliers. In 2002, they fell yet further fell after the 2002 implementation of a 27 percent softwood duty on Canada. The tariff, intended to limit Canadian imports led companies from north of the border to beat the penalty by maximizing production. When their American rivals did the same, lumber prices hit record lows. By 2003, slumping lumber prices led to the closure of five mills in the Pacific Northwest. Stimson closed its mill in Libby, Montana, which had been losing $500,000 a month.

At the end of 2005, the company closed its Atlas mill in Coeur d'Alene, putting 120 people out of work. This mill had manufactured cedar and pine boards for siding, fencing, decking, and trim, but customers' preference for vinyl siding and composite decking made it obsolete. However, there were purchases as well: In 2004, Stimson bought a small remanufacturing mill in Hauser, Idaho, adding to its three sawmills in North Idaho. It also began work on 4,000 feet of road in the Kaniksu National Forest in Northeast Washington to gain access to additional parcels of its land in the South Fork Mountain Roadless area.

Principal Competitors

Georgia-Pacific Corporation; International Paper Company; Weyerhauser Company.


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