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Timber giant Rayonier sees the forest AND the trees
An interview with Paul G. Boynton, CEO of Rayonier
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Florida Trend: Lee Thomas oversaw a record 68% shareholder return and increased the company's market cap by $1.3 billion during his five years as CEO — most of that during the downturn. How do you follow that?
PAUL BOYNTON: Under Lee's leadership, Rayonier put in place a strong strategy and executed well against it; you will see us continue to drive this path of value creation. With the same team, we will invest in high-quality timberlands, monetize properties that have higher value than timberland or no longer fit our portfolio and maintain our global leadership position in performance fibers.
FT: You've just acquired 250,000 acres of timberland in Mississippi, Louisiana, Oklahoma and Alabama, which shrinks the percentage of Florida holdings to about 16%. Does Florida's urbanization mean timber operations will shift elsewhere?
PB: Florida is an attractive market for us, and we will continue to look for growth opportunities here. This year, we've focused our acquisitions in a few regions like Louisiana and Mississippi where we felt our ownership was underrepresented and the quality of timberland is high and the product markets strong, bringing our total timberland ownership to 2.7 million acres.
FT: You have a $300-million capital project to convert a Georgia mill to 'high-purity cellulose specialties,' used from pharmaceuticals to LCD screens, already the focus of the Fernandina mill. Is this the company's future, or what balance do you see among traditional timber, specialty fibers and real estate?
PB: We've been the global leader in high-purity cellulose fibers for 80 years. We've sold all we produce for the past four to five years, and this Jesup, Ga., expansion allows us to meet our customers' growing needs. Additionally, at our Fernandina mill, we'll invest $45 million this year in projects to enhance quality, expand production and improve efficiencies. Our plans call for balanced growth in all three of our core businesses.
FT: Financials and markets aside, tell us something that might surprise us about pine trees.
PB: Working forests sustain vital plants and wildlife, filter our water and air, and mitigate climate change through carbon sequestration.
