VANCOUVER, BRITISH COLUMBIA and SEATTLE, WASHINGTON -- October 10, 2000-- West Fraser Timber Co. Ltd. (TSE: WFT) and Plum Creek Timber Company, Inc. (NYSE: PCL) today announced an agreement for West Fraser to acquire Plum Creek's Southern lumber manufacturing operations in Joyce, Louisiana and Huttig, Arkansas for US$60 million plus working capital. The two mills have the capacity to produce 300 million board feet of lumber per year. As part of the transaction, Plum Creek will enter into a 15-year renewable fiber supply agreement to provide logs from its surrounding timberlands to the facilities at market prices. West Fraser intends to retain all the operations' 430 employees and increase overall capacity to 400 million board feet. The sale is expected to close in the fourth quarter of 2000.
“This expansion into the United States represents a major opportunity for West Fraser,” according to Hank Ketcham, West Fraser's Chairman, President and CEO. “This acquisition allows us to take our successful, low-cost lumber manufacturing approach closer to our traditional market area while building an asset base with a long-term, plantation-based fibre supply,” Ketcham said. “We are excited because this transaction meets our strict financial goals and continues our strategy of geographic diversification.”
The sale is the next logical step in Plum Creek's strategy in the South, according to Rick R. Holley, Plum Creek's President and CEO. “Our manufacturing presence in the region is modest and not integral to our long-term objective of acquiring highly productive timberlands. This sale completes our shift to a pure timberland ownership and management focus in the region, where we will own over 4.4 million acres upon completion of our pending merger with The Timber Company. We are pleased to have a company with West Fraser's focus and reputation as a long-term customer for our logs in the region.”
West Fraser is one of Canada's largest integrated forest products companies with manufacturing operations in British Columbia and Alberta producing lumber, panelboards, mechanical pulp, linerboard, kraft paper and newsprint. West Fraser's Revy Home Centres Inc. owns and operates the second largest chain of retail home improvement stores in Canada.
Plum Creek, a real estate investment trust (REIT), is the fourth largest timberland owner in the nation, with timberlands and mills located in the Northwest, South and Northeast regions of the United States. On July 18, Plum Creek announced an agreement to merge with The Timber Company, a separate operating group of Georgia-Pacific Corporation, which will create the second largest timberland owner in the U.S., with approximately 7.9 million acres.
Plum Creek Timber Company, Inc.
Director, Investor Relations
West Fraser Timber Co. Ltd.
Chief Financial Officer
or Russ Clinton
Sr. VP Corporate Development