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August 14, 2010 Dear Friend,
We visited Plum Creek and Weyerhaeuser in
their headquarters accompanied by four buy-side institutions.
Plum Creek stressed how difficult it has
been and the extra efforts it has made to keep loggers, log truckers and
other such suppliers in business, and loyal to prefer working for Plum
Creek. It believes its "recovery" log sale sales would rebound just 1.0 to
1.5 million tons with perhaps a 1.0+ million ton mix shift to $20-$40 saw
logs from $10-$12 per ton pulp logs.
Weyerhaeuser expressed disappointment
with the May-June drop in new housing, and said it needed to cut deeper in
overhead staff, wood manufacturing and its homebuilder subsidiaries land
inventories. It repeated over and over again that Timberlands is its "core
business," and that it will reduce assets even more in Wood Mfg. and
its homebuilder. Research into biofuels is an important emphasis, and over
a longer period of time could give birth to new products with high value
added such as heating oil or gasoline from wood.
Faithfully,
John C. Tumazos, CFA
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Copyright © 2008 John Tumazos Very Independent Research,
LLC
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