Closing US Mills, Moving Overseas

Importing Wood from Around the World

U.S. Public Timber Cutting

Profile of the Boise Cascade Corporation

by George Draffan
Public Information Network
Endgame.org

Table of Contents
History
Board of Directors
Financial Information
Shareholders
Corporate and Public Timber Supplies
Operations and Facilities
Labor Issues
Subsidies
Environmental Record
Political Activities
Shareholder Resolutions
Legal Proceedings

 

 

Boise Announces Sale of Paper, Building Products, and Timberland Assets (July 26, 2004)
Boise Office Solutions will change its name to OfficeMax. The wood and paper assets (including 2.3 million acres of timberland, 5 pulp and paper rmills, and 22 wood products mills in the USA, Canada, and Brazil) will be acquired by Boise Cascade, L.L.C. which is controlled by Madison Dearborn Partners, a private equity firm with investments in communications, consumer, financial services, and healthcare, and involved in the buyout of other paper, packaging, and forest products comanies including Buckeye Technologies, Graphic Packaging International (formerly Riverwood International), Packaging Corporation of America, and Jefferson Smurfit Group.

Corporate headquarters:
One Jefferson Square
PO Box 50
Boise ID 83728

208-384-6161
208-384-7990
888-264-7388

www.bc.com

Boise Cascade Transforms. Timber Mart-South Market Newsletter, Third Quarter 2004.
Boise Cascade Corporation announced in late July its agreement to sell the company's paper, forest products and timberland assets for approximately $3.7 billion to Madison Dearborn Partners LLC, a private equity investment firm located in Chicago IL. According to BC chief operating officer (COO), George J. Harad, this sale will complete BC's transition from "a predominantly manufacturing-based company to a world-scale distribution company". BC will now focus on its office products distribution business and operate under the name OfficeMax, Inc. BC acquired Office Max last year and analysts have anticipated the current divestiture for about two years. The transaction, expected to close in November, will create a new privately held company, Boise Cascade, LLC with headquarters in Boise ID and W. Thomas Stephens as CEO. Stephens was previously president and CEO of MacMillan Bloedel Ltd. and former chairman, ten years. Companies include Buckeye Technologies, Graphic Packaging International, Riverwood International, Packaging Corporation of America, and Jefferson Smurfit Group. The new company will own Boise Building Solutions with its 22 wood product manufacturing facilities in the U.S., Canada and Brazil. Four of these are in the South with three in Louisiana: softwood plywood/veneer manufacturing facilities at Florien and Oakdale LA, and one engineered wood facility in Alexandria LA. BC also has one softwood sawmill at its Jackson AL site. The new company will also receive Boise Paper Solutions which has 5 pulp and paper mills as well as 13 other related facilities in the U.S. BC has two pulp mills in the South: one in Jackson AL with capacity of 800 tons per day (tpd) of hardwood and softwood kraft pulp, and the other in DeRidder LA with capacity of 1300 tpd of softwood kraft pulp. Combined estimated pulpwood consumption is about 3.6 million tons per year. In the timberland portion of the assets, Boise owns or controls approximately 2.3 million acres of timberland in the U.S., with 720,000 acres in Louisiana and Alabama.

 

History

Public Land Grants

The corporation now known as Boise Cascade was incorporated as Boise Payette by Frederick Weyerhaeuser and associates in 1913. Between 1913 and 1947, Boise Payette received at least 172,000 acres of the public lands granted to the Northern Pacific Railroad. More information on the railroad land grants can be found in the book Railroads and Clearcuts and from the Railroads and Clearcuts Campaign (www.landgrant.org). Boise Payette and Cascade Lumber (Yakima, Washington) were merged in 1957 into Boise Cascade.

Boise Cascade, Potlatch, and Weyerhaeuser were interlocked from the time of their incorporation by Weyerhaeuser and associates in the early 1900s until the 1980s, through members of the Bell, Clapp, Jewett, Musser, and Weyerhaeuser families. Boise Cascade, Great Northern Railroad, and Weyerhaeuser were interlocked from the 1910s to 1940s, through Frederick and F.E. Weyerhaeuser. Boise Cascade, Northern Pacific Railroad, and Potlatch were interlocked from 1947 to 1955 by G.F. Jewett. The connection with the land grant companies continued into the 1990s, through Northern Pacific's corporate descendants Burlington Northern Railroad and Burlington Resources, whose spin-offs include Plum Creek Timber. Boise Cascade, Burlington Northern Railroad, and Burlington Resources were interlocked from 1981 to 1992, by J.B. Parrish. Former chairman and CEO of Union Pacific William Cook was a Boise Cascade director in the 1990s.

Over the years Boise Cascade has tried diversifying into engineering, construction, and real estate, but has retrenched to concentrate on producing and distributing paper and other office supplies, and today gets 70 percent of its revenues and 90 percent of its profits from office products and paper (see financial section below).

 

Board of Directors

Warren F. Bryant

Chairman of the board, president, and chief executive officer of Longs Drug Stores.

Philip J. Carroll

Chairman and CEO of Fluor Corporation; director of Vulcan Materials. Former president and chief executive officer of Shell Oil Company 1993-1998.

Claire S. Farley

CEO of Trade-Ranger Inc., a global Internet-based marketplace dedicated to buying and selling materials and services used by the energy industry. Former CEO of Intelligent Diagnostics (artificial intelligence software used to diagnose medical conditions) from 1999 to 2000. Former corporate officer for Texaco from 1997 to 1999, having been with the company since 1981.

Rakesh Ganwal

Pres. and CEO of U.S. Airways Group. Former vice president of Air France from 1994 to 1996.

Richard R. Goodmanson

Vice president and chief operating officer of DuPont. Former president and CEO of America West Airlines 1996 to 1999. Former vice president of Frito-Lay 1992 to 1996.

Edward Hagenlocker

Director of Air Products and Chemicals, AmeriSource Corporation, and Nanophase Technologies. Former vice chairman of Ford Motor. Former chairman of Visteon Automotive Systems.

George J. Harad

Chairman, CEO, and director.

Executive officer of Boise Cascade since 1982; became director and president of Boise Cascade in 1991; CEO in 1994; chairman in 1995.

Francesca Ruiz de Luzuriaga

Independent business development consultant. Former executive with Mattel

Donald S. Macdonald

Director of Aber Diamond, Alberta Energy, Boltons Capital, Sun Life Financial Services of Canada, and TransCanada Pipelines. Senior advisor to UBS Bunting Warburg, a business group of UBS AG, one of the leading global financial services firms. Former counsel to Toronto law firm McCarthy Tétrault 1991-2000. Former member Canadian House of Commons, chairman Royal Commission on the Economic Union and Development Prospects for Canada, Canadian High Commissioner to Great Britain and Northern Ireland.

Gary G. Michael

Chairman and CEO of Albertson's. Director of Questar. Former chairman of the Federal Reserve Bank of San Francisco.

A. William Reynolds

CEO of Old Mill Group. Director of Eaton Corporation. Former CEO of GenCorp. Former chairman of the Federal Reserve Bank of Cleveland.

Jane E. Shaw

Chairman and CEO of AeroGen. Director of Intel, IntraBiotics Pharmaceuticals, and McKesson HBOC. Former CEO of ALZA Corp. Founded The Stable Network, a biopharmaceutical consulting firm, in 1995 and has worked as a consultant in the biopharmaceutical industry since that time.

Frank Shrontz

Former chairman and CEO of Boeing. Director of Chevron and Minnesota Mining & Manufacturing (3M).

Carolyn M. Ticknor

Director of Stamps.com. Former vice president of Hewlett-Packard.

Ward W. Woods Jr.

Director and partner of Bessemer Securities. Director of Contour Energy.

 

 

Financial Information

Sales and profits

 

2000 sales

($ billion)

% of total sales

2000 income

($ million)

% of total income

office products

3.7

45%

237

48%

building products

2.5

30%

52

11%

paper products

2.0

25%

203

41%

totals

8.2

100%

491

100%

net

$7.8

 

(net) $179

 

 

 

Boise Cascade Office Products

1999

1998

1997

office supplies

54%

61%

66%

office paper

15%

13%

13%

office furniture

12%

12%

11%

computer supplies

16%

10%

7%

promotional products

3%

4%

3%

 

 

Boise Cascade Office Products

United States

Canada

France

Other

1999 net sales

$2,584,966,000

$382,670,000

$240,500,000

$173,589,000

 

 

Year

Sales

($ million)

Net income

($ million)

Federal tax

($ million)

State tax

($ million)

Foreign tax

($ million)

1990

4,186

75

 

 

 

1991

3,950

- 79

 

 

 

1992

3,716

- 227

 

 

 

1993

3,958

- 77

 

 

 

1994

4,140

- 63

 

 

 

1995

5,074

352

-98.2

- 7.0

13

1996

5,108

9

-10.8

- 11.5

-3.1

1997

5,493

- 30

-

-

-9.3

1998

6,200

- 34

-

-

- 8.4

1999

7,000

200

- 15.2

- 2.1

- 13.5

2000

7,807

179

 

 

 

 

Note: "negative" taxes denote tax credits received from various governments.

 

Debt to Capital Ratio

Boise Cascade's debt is high compared to the timber industry-wide median debt to capital ratio of 37 percent.

 

Year

Debt ratio

1997

54

1996

49

1995

48

1994

59

1993

57

1992

62

1991

61

1990

57

1989

49

1988

37

 

 

The following information on bondholders and banks financiers is from Focus on Finance Newsletter, March 2001.

At the end of 1999, the assets of Boise Cascade amounted to a total of US$ 5.1 billion. The following actors financed these assets:

Shareholders

31.4%

Bondholders

25.8%

Banks

11.9%

Other creditors

30.9%

 

Bondholders

Boise Cascade and its subsidiary Boise Cascade Office Products have issued various forms of bonds (notes, debentures and revenue bonds) to finance their activities. Outstanding at the end of 1999 was US$ 1.3 billion. As none of these bonds is listed on a stock exchange, it is very difficult to identify the bondholders.

Banks

Boise Cascade and its subsidiaries owed US$ 609 million to various banks at the end of 1999. Three loan agreements are responsible for the largest part of this amount:

1. A revolving credit agreement signed between Boise Cascade and a group of banks in March 1997, arranged by Bank of America National Trust and Savings Association, the Chase Manhattan Bank and National Westminster Bank. The agreement allows the company to borrow as much as US$ 600 million at variable interest rates, and expires in June 2002. The agreement also contains an expansion option, which entitles the company to increase the borrowing to a maximum of US$ 750 million.

At the end of 1999, Boise Cascade had borrowed US$ 185 million under this agreement. The importance of this revolving credit agreement however goes beyond this figure: it gives the company the financial ability to react instantly at any investment opportunity which might arise.

The group of banks (with in brackets their nationality and financial commitment) consists of:

Bank of America National Trust and Savings Association (United States; US$ 40 million)

Chase Manhattan Bank (United States; US$ 40 million)

National Westminster Bank (United Kingdom; US$ 40 million)

ABN-Amro Bank (The Netherlands; US$ 30 million)

CIBC (United States; US$ 30 million)

Mellon Bank (United States; US$ 30 million)

Morgan Guaranty Trust Company of New York (United States; US$ 30 million)

Toronto Dominion (Canada; US$ 25 million)

Union Bank of Switzerland (Switzerland; US$ 25 million)

Wachovia Bank of Georgia (United States; US$ 25 million)

Bank of Montreal (Canada; US$ 25 million)

Crédit Lyonnais (France; US$ 25 million)

Nationsbank of North Carolina (United States; US$ 25 million)

Northern Trust Company (United States; US$ 25 million)

Royal Bank of Canada (Canada; US$ 25 million)

Société Générale (France; US$ 25 million)

U.S. Bank of Idaho (United States; US$ 15 million)

Sanwa Bank (Japan; US$ 15 million)

Wells Fargo Bank (United States; US$ 15 million)

Crédit Suisse First Boston (Switzerland; US$ 15 million)

First Bank National Association (United States; US$ 15 million)

First Security Bank (United States; US$ 15 million)

Industrial Bank of Japan (Japan; US$ 15 million)

Long Term Credit Bank of Japan (Japan; US$ 15 million)

Australia and New Zealand Banking Group (Australia; US$ 15 million)

2. Boise Cascade Office Products (BCOP), now a full subsidiary of Boise Cascade, signed a revolving credit agreement with a group of banks in June 1997, arranged by Morgan Guaranty Trust Company of New York and the Chase Manhattan Bank. The agreement allows BCOP to borrow as much as US$ 450 million at variable interest rates, and expires in June 2001. At the end of 1999, BCOP had borrowed US$ 190 million under this agreement.

The group of banks (with in brackets their nationality and financial commitment) consists of:

 Morgan Guaranty Trust Company of New York (United States; US$ 45 million)

Chase Manhattan Bank (United States, US $ 45 million)

Bank of America National Trust and Savings Association (United States, US$ 32.5 million)

CIBC (United States, US$ 32.5 million)

Northern Trust Company (United States, US$ 32.5 million)

Wachovia Bank (United States, US$ 32.5 million)

Crédit Lyonnais (France, US$ 25 million)

Mellon Bank (United States, US$ 25 million)

NationsBank (United States, US$ 25 million)

Royal Bank of Canada (Canada, US$ 25 million)

Toronto Dominion (Canada, US$ 25 million)

ABN-Amro Bank (Netherlands, US$ 15 million)

Bank of Montreal (United States, US$ 15 million)

Bank of New York (United States, US$ 15 million)

First Bank National Association (United States, US$ 15 million)

National Westminster Bank (United Kingdom, US$ 15 million)

Union Bank of Switzerland (Switzerland, US$ 15 million)

Wells Fargo Bank (United States, US$ 15 million)

 

3. Boise Cascade guaranteed a debt of US$ 133 million with an unknown bank, to fund an employee stock ownership plan (ESOP) that is part of the Savings and Supplemental Retirement Plan for the company's U.S. salaried employees.

 

Shareholders

Major Shareholders

% of total shares

Date

STATE STREET BANK AND TRUST

10.98%

(PRX 03-21-2000)

DODGE & COX

6.10

(PRX 03-21-2000)

FORSTMANN-LEFF ASSOCIATES LLC

11.50%

(PRX 03-21-2000)

MORGAN STANLEY DEAN

5.17%

(PRX 03-21-2000)

TYPE

DATE(Q,M)

NUMBER

SHARES HELD

% OF TOTAL SHARES

INSTITUTIONS

09/30/2000(Q)

199

48,898,000

85

5% OWNERS

09/30/2000(M)

8

38,231,000

67

INSIDERS

09/30/2000(M)

18

37,000

0.06

Note: Insiders have recently sold 228,364 shares.

 

Institutional Ownership

(only shareholders of more than 100,000 shares are listed; public institutions are listed in bold)

 

latest quarter change in shares

shares held

date

FORSTMANN-LEFF ASSOCIATES

-356,519

9,147,991

09/30/2000

DODGE & COX, INC.

255,850

4,130,899

09/30/2000

STATE STREET CORPORATION

9,311

3,015,714

09/30/2000

FRANKLIN RESOURCES INC

263,280

2,889,998

09/30/2000

MSDW & COMPANY

727,351

2,659,254

09/30/2000

PUTNAM INVESTMENT MANAGEMENT

1,502,295

2,578,260

09/30/2000

BARCLAYS BANK PLC

-166,221

1,769,362

09/30/2000

SANFORD C BERNSTEIN & CO

-74,175

1,295,562

09/30/2000

MERRILL LYNCH INVESTMENT

218,418

1,278,843

09/30/2000

JENNISON ASSOCIATES LLC

617,200

1,195,400

09/30/2000

DIMENSIONAL FUND ADVISORS

101,300

1,026,500

09/30/2000

VANGUARD GROUP

2,571

988,737

09/30/2000

LUTHER KING CAPITAL MANAGE

253,050

926,050

09/30/2000

SUNTRUST BANKS INC

-75,908

713,126

09/30/2000

FUND ASSET MANAGEMENT

175,400

629,100

09/30/2000

PRIMECAP MANAGEMENT COMPANY

-5,400

623,195

09/30/2000

BANK ONE CORPORATION

551,582

602,607

09/30/2000

OHIO PUBLIC EMPLOYEES RETIR

-1,254

555,355

09/30/2000

DEPRINCE, RACE & ZOLLO

-5,900

514,800

09/30/2000

TAUNUS CORPORATION

-85,828

481,177

09/30/2000

MCGLINN CAPITAL MANAGEMENT

-5,550

467,833

09/30/2000

BANKMONT FINANCIAL CORP

-27,795

446,424

09/30/2000

MELLON BANK NA

-158,299

418,193

09/30/2000

LSV ASSET MANAGEMENT

-9,500

407,170

09/30/2000

COLLEGE RETIRE EQUITIES

23,800

398,532

09/30/2000

FIDELITY MANAGEMENT & RESEA

93,200

391,160

09/30/2000

CITIGROUP INC

-942,831

364,346

09/30/2000

OLSTEIN & ASSOCIATES, L. P.

-70,100

352,400

09/30/2000

INVESCO CAPITAL MANAGEMENT

-12,900

340,001

09/30/2000

ADVISORY RESEARCH, INC.

40,723

312,603

09/30/2000

DRESDNER RCM GLOBAL INVEST

302,050

302,050

09/30/2000

WELLINGTON MANAGEMENT CO

4,000

285,900

09/30/2000

BATTERYMARCH FINANCIAL MAN

0

275,100

12/31/1999

PRUDENTIAL INSURANCE CO

-137,700

243,992

09/30/2000

FIRST UNION CORPORATION

-195,995

242,348

09/30/2000

CALIFORNIA PUBLIC EMPLOYEES

0

228,223

09/30/2000

PETROLEUM & RESOURCES

0

205,000

09/30/2000

INVESCO (NEW YORK)

10,800

201,601

12/31/1999

WELLS FARGO BANK, N.A.

176,629

200,846

06/30/2000

OPPENHEIMERFUNDS INC.

0

200,000

09/30/2000

NORTHERN TRUST COMPANY

-8,253

190,699

09/30/2000

CALIFORNIA STATE TEACHERS R

400

190,235

09/30/2000

JACOBS LEVY EQUITY MANAGEME

-212,900

181,800

09/30/2000

TEACHER RET SYS OF TEXAS

-24,000

179,300

09/30/2000

TURNER INVESTMENT PARTNERS,

-2,370

176,960

09/30/2000

NEW YORK STATE COMMON RETIR

-34,200

176,273

09/30/2000

LUTHERAN BROTHERHOOD

0

175,600

09/30/2000

DENVER INVESTMENT ADVR LLC

14,300

167,400

09/30/2000

FLORIDA STATE BOARD OF ADMI

-6,300

164,950

09/30/2000

CROFT-LEOMINSTER, INC.

-16,675

163,687

09/30/2000

INVESTMENT RESEARCH COMPANY

25,000

161,100

09/30/2000

COLONIAL MANAGEMENT ASSOCIA

-200

144,000

09/30/2000

WILSHIRE ASSOC INC

600

140,932

09/30/2000

DEWEY SQUARE INVESTORS CORP

-3,000

137,780

09/30/2000

WM ADVISORS, INC.

2,800

135,808

09/30/2000

DAVID VAUGHAN INVESTMENTS

23,100

124,431

09/30/2000

DONALD SMITH & COMPANY

0

110,000

09/30/2000

AXA FINANCIAL, INC.

-15,380

100,476

09/30/2000

PRINCIPAL LIFE INSURANCE

-849,633

96,058

09/30/2000

COLUMBIA MANAGEMENT COMPANY

-113,000

90,200

09/30/2000

VIRGINIA RETIREMENT SYS

7,800

88,971

09/30/2000

CHASE MANHATTAN CORP

-3,600

87,525

09/30/2000

WYSER-PRATTE MANAGEMENT

80,000

80,000

09/30/2000

CHARLES SCHWAB INVESTMENT

266

76,082

09/30/2000

WORLD ASSET MANAGEMENT

-2,538

62,626

09/30/2000

APEX CAPITAL, LLC

0

60,000

09/30/2000

BANK OF AMERICA CORPORATION

-16,751

59,348

09/30/2000

UNITED STATES TRUST COMPANY

11,480

58,705

09/30/2000

NATIONWIDE MUTUAL INS CO

-70,100

55,000

09/30/2000

BEAR, STEARNS & CO. INC.

6,820

54,282

09/30/2000

FROST NATIONAL BANK

0

52,158

09/30/2000

FRANK RUSSELL COMPANY

-130,100

51,100

09/30/2000

PAINEWEBBER GROUP INC

-1,186

48,796

09/30/2000

IBM RETIREMENT FUNDS

418

48,721

09/30/2000

AELTUS INVESTMENT MANAGEMEN

3,450

46,652

09/30/2000

CATALYST INVESTMENT MGMT.

-83,758

46,242

09/30/2000

STATE TEACHERS RET SYST OF

-3,700

46,008

09/30/2000

INVESCO MANAGEMENT & RESEAR

6,100

44,100

12/31/1999

ROULSTON & COMPANY, INC.

-4,550

43,500

09/30/2000

CREDIT SUISSE FIRST BOSTON

4,984

41,651

09/30/2000

LASALLE NATIONAL BANK

-1,975

41,382

09/30/2000

UBS WARBURG LLC

-62

39,955

09/30/2000

RAYMOND JAMES & ASSOCIATES,

675

37,115

09/30/2000

METROPOLITAN LIFE INSURANCE

200

36,967

09/30/2000

T. ROWE PRICE ASSOCIATES

-911

35,900

09/30/2000

PENNSYLVANIA PUBLIC SCHOOL

-40,900

34,093

09/30/2000

BEL AIR INVESTMENT ADVISORS

34,000

34,000

09/30/2000

STATE OF MICH STATE TREASUR

-300

33,064

09/30/2000

NOMURA SECURITIES CO., LTD.

-1,595

32,955

09/30/2000

SCUDDER KEMPER INVESTMENTS,

32,136

32,936

09/30/2000

PUBLIC EMPLOYEES RETIREMENT

-800

31,900

09/30/2000

GOLDMAN SACHS & COMPANY

-39,610

29,800

09/30/2000

MERRILL LYNCH & CO INC

-7,522

28,895

09/30/2000

COMERICA INC

-377

28,754

09/30/2000

LEGAL & GENERAL GROUP PLC

3,841

28,363

09/30/2000

NWI MANAGEMENT, L. P.

28,000

28,000

09/30/2000

CIGNA CORPORATION

600

26,504

09/30/2000

UNION PLANTERS BANK, NA

25,700

25,700

09/30/2000

AMERICAN GENERAL CORPORATIO

-500

25,400

09/30/2000

PACIFIC INCOME ADVISERS

25,020

09/30/2000

 

MEEDER ASSET MANAGEMENT

0

24,400

09/30/2000

U S WEST INVESTMENT MANAGEM

24,042

09/30/2000

 

HARVARD COLLEGE

-245,000

23,300

09/30/2000

NEW YORK LIFE INSURANCE CO

22,150

09/30/2000

 

COBALT CAPITAL MANAGEMENT

20,000

09/30/2000

 

JOHNSON ASSET MANAGEMENT OF

20,000

20,000

09/30/2000

MCGAHAN GREENE MCHUGH CAPIT

20,000

09/30/2000

 

ADDISON CAPITAL MANAGEMENT,

3,100

19,440

09/30/2000

AMALGAMATED BANK OF NEW YOR

19,065

09/30/2000

 

BANK OF NEW YORK

-600

18,464

09/30/2000

PRUDENTIAL SECURITIES INC.

-2,066

18,450

09/30/2000

BNP PARIBAS ARBITRAGE SNC

18,276

18,276

09/30/2000

NORTHWESTERN MUTUAL INVT

-100

18,100

09/30/2000

TRW INVESTMENT MANAGEMENT

18,000

09/30/2000

 

U S BANCORP

1,296

17,764

09/30/2000

I. G. INVESTMENT MANAGEMENT

17,000

09/30/2000

 

KEN ROBERTS INVESTMENT MANA

16,950

09/30/2000

 

HARTFORD INVESTMENT MANAGE

16,586

09/30/2000

 

KEY TRUST COMPANY OF OHIO N

16,178

09/30/2000

 

KENTUCKY TEACHERS RETIREMEN

15,300

09/30/2000

 

PANAGORA ASSET MANAGEMENT I

14,452

09/30/2000

 

FEDERATED INVESTORS INCORPO

13,800

09/30/2000

 

SEARS INVESTMENT MANAGEMENT

0

13,800

09/30/2000

JEMMCO INVESTMENT MANAGEMEN

13,400

09/30/2000

 

JP MORGAN & COMPANY INC

-7,368

13,231

09/30/2000

JOHN D & CATHERINE T MACART

13,137

06/30/2000

 

TD ASSET MANAGEMENT INC.

-3,703

12,899

09/30/2000

AMERICAN EXPRESS FINANCIAL

12,778

09/30/2000

 

INTEL CORPORATION

-500

12,255

09/30/2000

WEISS, PECK & GREER, L.L.C.

-8,150

11,796

09/30/2000

GW CAPITAL MANAGEMENT, INC.

-400

11,550

09/30/2000

FERGUSON, WELLMAN, RUDD, PU

11,175

09/30/2000

 

PIMCO ADVR L P

34

11,157

09/30/2000

FIRSTAR CORPORATION

4,722

10,650

09/30/2000

STATE STR RESEARCH & MANAGE

10,273

09/30/2000

 

EXXONMOBIL INVESTMENT MGMT

-1,000

10,239

09/30/2000

RESOURCE TRUST COMPANY

0

10,000

09/30/2000

 

5% Beneficial Ownership

NAME OF OWNER

SHARES HELD

DATE

BERNSTEIN INVESTMENT RESEARCH

3,169,448

12/31/1994 13G

DODGE & COX, INC.

3,479,913

12/31/1999 13G

FORSTMANN LEFF ASSOCIATES INC

6,571,851

12/31/1999 13G

FORSTMANN-LEFF ASSOCIATES, LLC

9,496,110

06/30/2000 13G

FRANKLIN ADVISERS, INC.

75,843

01/05/2000 13G

MSDW

4,904,157

12/31/1998 13G

MSDW & COMPANY

2,953,102

12/31/1999 13G

STATE STR BANK & TRUST COMPANY

7,580,544

12/31/1999 13G

TOTAL OF 8 OWNERS

38,230,968

 

 

Insider Ownership

 

Relationship

Shares held

Date

SPENCER EDSON W

D

16,774

08/1998

MILLIKEN CHRISTOPHER C

VP

4,600

05/2000

HARAD GEORGE J

CB

3,511

05/2000

PARRISH RICHARD B

VP

3,358

11/1997

MICHAEL GARY G

D

2,345

08/2000

SPENCE N DAVID

VP

2,028

05/2000

DANIS PETER G

O

1,300

04/1998

CRUMLEY THEODORE

CF

1,247

05/2000

RUIZ DE LUZURIAGA FRANCES D

D

1,000

01/1999

HANNITY VINCENT T

VP

481

12/1997

MACDONALD DONALD S

D

200

04/2000

BENDER JOHN C

VP

132

08/1999

LOWE JEFFREY G

VP

93

07/1999

HOLLERAN JOHN W

VP

70

05/2000

BALKINS JAMES A

VP

65

07/1999

CARLILE TOM E

VP

52

05/2000

MERSON RICHARD W

VP

46

07/1999

HURLBUTT GUY GORDON

VP

31

07/1998

TOTAL OF 18 OWNERS

 

37,333

 

Note: These insiders have recently sold 228,364 shares.

 

Corporate and Public Timber Supplies

Acres of Timberland Controlled

As mentioned at the beginning of this profile, much of "Boise Cascade's" land came from a huge (and improper) public land subsidy in the 19th century. By the 1960s, Boise Cascade held ten billion board feet on 1.5 million acres in the Northwestern, Midwestern, and Southern U.S., and in the Philippines; it had cutting rights to another four million acres in Canada.

Boise Cascade held 2.6 million acres in the U.S. in the early 1980s. In the 1980s it reduced its holdings in the western Cascades, from 597,000 acres to 450,000 acres. In June 1991 it sold another 30,000 acres in western Oregon. Its holdings include 30,000 acres inside the Colville Indian Reservation in eastern Washington. (Cutting rights in Canada transferred to Rainy in 1995).

As of 1999, Boise Cascade owns or leases more two million acres in the United States: 1,400,000 acres in the Northwest, 300,000 acres in the Midwest, and 700,000 acres in the South.

 

Northwest

Midwest

U.S. South

Total

Fee

1,331,000

308,000

418,000

2,057,000

Lease or contract

51,000

---

284,000

335,000

Total

1,382,000

308

702,000

2,392,000

Percentage of cut from company-controlled land

25 %

23 %

25 %

25 %

 

 

Timber Inventories

Year-end

Merchantible sawtimber

(billion board feet)

Pulpwood

(million cords)

1995

9.0

15.9

1996

7.6

7.6

1997

7.7

7.8

 

 

Purchases of Public Timber

Despite owning or leasing more than two million acres in the United States, only a third of the billion board feet of sawtimber and a million and a half cords of pulpwood Boise Cascade mills consumed in 1998 came from its own land.

Boise Cascade was by far the #1 purchaser of U.S. National Forest timber during the last decade (1991-2000). Boise Cascade's U.S. Public Timber Cutting

 

Top Ten Puchasers of National Forest Timber, 1991-2000

Purchaser

Thousand Board Feet Cut

Dollars

Paid

Boise Cascade

807,221

$172,695,829

Sierra Pacific Industries

681,985

$141,259,586

Ketchikan Pulp Co

600,029

$51,200,532

Weyerhaeuser Co

419,142

$64,450,875

Louisiana-Pacific Corp

407,669

$48,834,883

Alaska Pulp Corp

393,068

$18,064,485

D.R. Johnson Lumber (Oregon)

352,578

$58,493,156

Stone Container Corp

263,689

$31,994,557

Georgia-Pacific

249,624

$39,755,698

Biewer Sawmill (Michigan)

217,032

$17,841,492

 

 

Boise Cascade's Public Timber Purchases, by National Forest Region

US Forest Service
Region

No. of timber sales purchased by
Boise Cascade

Thousand board feet
cut

Amount paid by Boise Cascade

Region 1

1

12,952

$3,191,380

Region 3

1

4,345

$1,174,388

Region 4

103

400,787

$89,207,114

Region 5

3

5,222

$2,438,523

Region 6

99

270,756

$69,907,011

Region 9

30

113,159

$6,777,413

Total

807,221

$172,695,829

 

Boise Cascade's Public Timber Purchases, by National Forest

National Forest

USFS Region

No. of timber sales purchased by Boise Cascade

Thousand board feet cut

Amount paid by Boise Cascade

Nez Perce

1

1

12,952

$3,191,380

Kaibab

3

1

4,345

$1,174,388

Boise

4

70

248,006

$49,387,075

unknown

4

1

1,444

$344,928

Dixie

4

1

2,298

$168,076

Payette

4

24

136,945

$38,194,294

Salmon and Challis

4

1

259

$55,944

Sawtooth

4

6

11,835

$1,056,797

Klamath

5

3

5,222

$2,438,523

Deschutes

6

2

2,160

$723,598

Fremont

6

3

3,410

$1,443,585

Malheur

6

9

23,224

$8,113,591

Ochoco

6

1

2,482

$133,293

Okanogan

6

9

14,885

$3,750,353

Rogue River

6

6

12,812

$4,922,226

Siuslaw

6

3

11,894

$2,612,059

Umatilla

6

11

38,675

$4,885,479

Umpqua

6

4

24,186

$13,974,288

Wallowa-Whitman

6

20

40,540

$7,154,068

Wenatchee

6

9

30,792

$1,984,761

Willamette

6

2

5,271

$1,827,018

Winema

6

8

33,819

$13,069,173

Colville

6

12

26,605

$5,313,518

Chippewa

9

7

14,256

$1,085,412

Superior

9

23

98,903

$5,692,001

 

According to Common Cause, Boise Cascade was the second-largest recipient of U.S. Forest Service road credits (public subsidies to build logging roads across national forests) from 1991 to 1997:

Sierra Pacific Industries

$ 20,314,336

Boise Cascade

$ 18,894,511

Willamette Industries

$ 8,777,755

Weyerhaeuser

$ 7,460,715

Stone Container

$ 5,260,687

Plum Creek Timber

$ 4,648,460

Potlatch

$ 4,172,731

Hi-Ridge Lumber

$ 3,791,097

Champion International

$ 3,595,788

Shearer Lumber

$ 3,352,075

 

Operations and Facilities

 

Products

State

Location

Notes

Paper, uncoated free sheet, market pulp

Alabama

Jackson

 

Paper, containerboard, newsprint

Louisiana

DeRidder

 

Paper, uncoated free sheet

Minnesota

International Falls

 

Paper, uncoated free sheet, market pulp

Oregon

St Helens

 

Paper, uncoated free sheet, containerboard, market pulp

Oregon

Wallula

20,000 acres of cottonwood trees.

Corrugated container

Idaho

Burley

 

Corrugated container

Idaho

Nampa

 

Corrugated container

Nevada

Sparks

 

Corrugated container

Oregon

Salem

 

Corrugated container

Utah

Salt Lake City

 

Corrugated container

Washington

Spokane

 

Corrugated container

Washington

Wallula

 

Office products distribution centers

U.S.

32 states

 

Office products distribution centers

Australia

7 locations

 

Office products distribution centers

Canada

AL, BC, MN, NB, ON, QE

Includes 70 retail stores.

Office products distribution centers

Farnce

Paris

 

Office products distribution centers

Germany

Hamburg

 

Office products distribution centers

UK

Bolton and Dorchester

 

Building materials wholesale distribution centers

AZ, CO, ID, MN, MT, NM, OK, TX, UT, WA

 

 

Plywood/veneer

Louisiana

Florien

 

Plywood/veneer

Louisiana

Oakdale

 

Plywood/veneer

Oregon

Elgin

 

Plywood/veneer

Oregon

Independence

 

Plywood/veneer

Oregon

Medford

 

Plywood/veneer

Oregon

St Helens

 

Plywood/veneer

Oregon

White City

 

Plywood/veneer

Oregon

Willamina

 

Plywood/veneer

Washington

Kettle Falls

 

Plywood/veneer

Washington

Yakima

 

Lumber

Alabama

Jackson

 

Lumber

Louisiana

Fisher

 

Lumber

Oregon

Elgin

 

Lumber

Oregon

La Grande

 

Lumber

Oregon

Medford

 

Lumber

Oregon

White City

 

Lumber

Washington

Kettle Falls

 

Lumber

Washington

Yakima

 

Particleboard

Oregon

La Grande

 

Oriented strand board

Canada

Ontario, Barwick

47 % interest in OSB joint venture

Laminated neveer lumber, wood I-joists

Louisana

Alexandria

 

Laminated neveer lumber, wood I-joists

Oregon

White City

 

 

 

Past and Current Subsidiaries

Subsidiary

Location

Notes

BC Foreign Sales Corp.

Virgin Islands, St. Thomas

Manufacturer of stationary and paper products.

BCT

Idaho, Boise

Trucking company.

Beaver Falls Power Co.

New York, Beaver Falls

Utility.

Boise Cascade Canada Ltd.

Ontario, Toronto

Manufacturing of pulp and paper.

Boise Cascade Office Products Corp.

Boise ID

Spun off in April 1995; at year-end 1997, Boise held 81 % of the common stock.

Boise Cascade Office Products Corp.

Europe.

Boise has a 50 % interest in a marketing joint venture with Otto Versand.

Boise Cascade Sales Ltd.

England, Amersham, Bucks.

Wood products distribution.

Boise Southern.

 

 

Bovill

Idaho, Boise

Holding company for investments in joint ventures.

Brownville Power Co.

New York, Brownville

Utility.

Clearfield Insurance Ltd.

Idaho, Boise

Insurance.

Compania Industrial Puerto Montt SA

Chile, Bahia Ilque.

1998 joint venture with Forestal Condor.

Costa Grande Forest Products

Mexico, Guerrero, Papanoa.

 

Cuban Electric Co.

Idaho, Boise

Holding company incorporated in Florida; assets expropriated by Cuban government.

Duropack Welpappe Aktiengesellschaft

Austria, Vienna

Manufacturing of containers; Boise Cascade owns 50 percent.

Duropack Welpappe Gesellschaft m.b.H.

Austria, Kalsdorf bei Graz

Container manufacturing.

Ebasint International Inc.

Idaho, Boise

Public utility service.

Emmett Power Co.

Idaho, Boise

Cogeneration and hydroelectric.

Horseshoe Bend Hydroelectric Co.

Idaho, Boise

Hydroelectric and cogeneration project.

International Falls Power Co.

Minnesota, International Falls

Utility.

Kettle Falls Limestone Co.

Idaho, Boise

 

King Solomon Mining Corp.

Idaho, Boise

 

Minnesota Dakota & Western Railway

Minnesota, International Falls

Shortline railroad incorporated in Minnesota.

Norlig Mining Co.

Idaho, Boise

Mineral resources exploration and development.

Normin Mining Co.

Idaho, Boise

 

Oquossoc Mineral Corp.

Idaho, Boise

 

Orient Mining Co.

Idaho, Boise

 

Oxford Paper Co.

Maine, Rumford

Forest products and paper manufacturing; in 1996, Boise sold 667,000 acres of timberland to Mead Corp. in connection with the sale of its coated publication paper business.

Pine City Fiber Company.

 

 

Ponderosa Fibres

Washington

Boise has a 25 % interest.

Rainy River Forest Products

Canada

Canadian subsidiary spun off in Oct. 1994; Boise owned 49 % of Rainy River common stock and 60 % of the total equity. With Rainy River's merger with Stone Consolidated in Nov. 1995, Boise exchanged its interest in Rainy for Stone Consolidated's common stock; in 1996, Boise sold its Stone stock.

Rumford Cogeneration

Idaho, Boise

Hydroelectric and cogeneration project.

Schumacher GmbH & Co. OHG

Germany, Ansbach

Container manufacturing.

SNC Mining Co.

Idaho, Boise

 

Voyageur Panel

Ontario, Canada

47 % interest.

 

Cutting Jobs at Boise Cascade

Mill closures and restructuring reduced employment at Boise Cascade from 35,000 in the 1980s to 22,000 employees in 1997.

Boise Cascade's "Blueprint for the '90s" called for a shift of its pulp and paper operations away from the Pacific Northwest. During the 1980s, Boise Cascade increased its mill capacity in the southern U.S. by 475 percent, while decreasing its Pacific Northwest "westside" capacity by 19 percent, and began selling off timberland:

By the year 2001, Boise Cascade's Idaho operations had ceased altogether.

 

Revenues

U.S.$

billions

Profits U.S.$ millions

CEO pay

salary/bonus

stock options

Current employ-ment

Jobs lost

U.S. land controlled (acres)

Non-U.S. land controlled

(acres)

Boise Cascade

6.162

(37)

$1,642,832

$ 811,092

23,039

13,000 jobs lost 1980s-1997

2,392,000

Canadian and Chilean joint ventures.

 

When it closes mills, Boise Cascade typically blames environmental restrictions, "the ongoing global financial crisis," the "weak business environment," -- but Boise Cascade's "Blueprint for the '90s" called for a deliberate shift of its pulp and paper operations away from the Pacific Northwest. During the 1980s, Boise Cascade increased its mill capacity in the southern U.S. by 475 percent, while decreasing its Pacific Northwest "westside" capacity by 19 percent. But at the same time Boise is closing sawmills at home, it is "taking steps to access foreign wood baskets."

 

International Operations

Boise Cascade Office Products is expanding across the globe by buying up office, computer, and paper products companies. In 1996, 19 businesses were acquired, including 4 in Canada and 3 in Australia. In 1997, BCOP bought 8 businesses, including 2 in France and 1 in the UK. In 1998, BCOP acquired another 6 businesses, including 1 in Spain and 2 in Canada. "Executives at Boise Cascade Office Products plan to continue the company's bold corporate growth strategy into... the next millennium."

While it searches the globe for cheaper timber and more office products customers, Boise Cascade is a member of the nonprofit association Buy Idaho. "The concept of marketing goods and services locally is a viable concept," claims former radio station owner Dale Peterson, who is Buy Idaho's Executive Director. Bruce Belcher, a former advertising agency owner and now the president of Buy Idaho's board, said "the backbone of the U.S. economy is still small businesses and homegrown businesses," and "we have a number of people who feel it's a patriotic Idaho thing to support."

Meanwhile, state and federal funding goes towards picking up the pieces. The Idaho Small Business Development Center has opened offices to aid struggling businesses in Council, Horseshoe Bend, and other towns abandoned by Boise Cascade.

Brazil

Joint venture with Companhia Suzano de Papel e Celulose, a major Brazilian pulp and paper producer, to acquire and operate Boise Cascade's Jackson, Alabama pulp mill.

Joint venture with Grupo Klabin (Papel e Celulose) headquartered in Curitiba, Brazil: Boise Cascade in June 1999 signed an agreement with Industrias Klabin de Papel e Celulose S.A. from Brazil, to establish a 50-50% joint venture (Klabin Boise Madeiras S.A.) to produce and market pine lumber. The estimated US$90 million investment in the sawmill project is financed primarily by equity contributed by the partners and by long-term debt financing from Banco Nacional de Desenvolvimento Economico e Social (BNDES) from Brazil. BNDES is one of the few financial institutions in the world that has made FSC certification a requirement for receiving loans from a recently approved credit package to finance the harvesting of timber and other forest products from natural forests. This project poses a new challenge to Boise Cascade, because Klabin's 219.000 hectares plantation area is already FSC-certified. As 85% of the pine lumber will be exported, mostly to the USA, the question rises if Boise Cascade will market these products under the FSC-logo.

Canada

Boise Cascade owns a 47 percent interest in the Voyageur Panel oriented strand board (OSB) venture in Ontario. Boise Cascade operates the plant and markets the 400 million square feet of OSB produced annually.

 

Chile

In 1997, Boise Cascade and the Chilean firm Maderas Condor S.A. (aka Forestal Condor) formed a joint venture named Cascada Chile (later named Company Industrial Puerto Montt, or CIPM) to build a $180 million in a wood-chipping and oriented strand board facility in Bahia Ilque, Chile. The plant would produce 400 million square feet of OSB a year, doubling Boise Cascade's OSB capacity.

An environmental impact study for the project prepared by Dames & Moore (the same consulting form which prepared a study for Trillium's proposed timber project in Chile) analyzed only the impacts of building the mill and port, and not the impacts of cutting thousands of acres of timber to feed the mill. Cascada Chile has published advertisements distorting citizen opposition, and the local newspaper Llanquihue published an editorial supporting the "Ilque and the hen of gold eggs" and attacking opponents as "eco-terroristas."

The public relations firm Burson Marsteller, contracted by Boise Cascade, tried to distort the findings of a technical study done by the department of forestry at the Universidad de Concepcion, but two days later the university foresters revealed the manipulation of their technical report, and declared that the project is unsustainable. When deputies of the House of Representatives visited Ilque in September 1998 to present opposition to the Cascada project, and criticized the Forest National Corporation (CONAF) for irregularities at the local and regional level, the company paid more than 20 farmers to demonstrate against the deputies.

Numerous lawsuits have been filed against the project, one by the local salmon industry, another by adjacent property owners. Another lawsuit charged that the Chilean Congress improperly approved the project. Yet another lawsuit was filed on behalf of NGOs, small farmers, scientists, and local people claiming that the project would violate the constitutional right to a clean environment. And CRS Forestal filed suit against Boise Cascade, accusing it of illegally appropriating the intellectual idea of the Cascada OSB project.

Chronology

May 1997: Boise Cascade and the Chilean firm Maderas Condor (aka Forestal Condor) formed a joint venture to build a $180 million in a wood-chipping and oriented strand board facility in Bahia Ilque Chile The plant would produce 400 million square feet of OSB a year, doubling Boise Cascade's OSB capacity.

The venture was named Cascada Chile (later Company Industrial Puerto Montt S.A.). Directors included two Boise Cascade vice presidents, John W. Holleran and Karen Gowland; and Joseph S. Munson and Steven Thomas.

November 1997: Chile Cascade entered two estates (Roll Nro. 2114-29) in the Puerto Montt commune, and took part in locating archaeological and conchales sites in these estates. It cuts native forests without management plans, breaking national laws regarding monument and archaeological sites (decree 701 of forest promotion and law 19,300 of Bases of the Environment).

March 1998: the joint venture's Canadian partners file suit against Boise Cascade , accusing it of the illegal appropriation of the intellectual idea of the Cascada OSB project.

May 1998: The Ministry of National Goods of Chile gives a direct lease to CIPM for both fiscal estates, for a term of 5 years for $1,465,750. The lease is made in spite of knowledge that the company already had violations (file 980211707217 Ministry of National Goods).

May 1998: CIPM environmental impact study prepared by Dames & Moore, the same consulting form which prepared a study for Trillium's proposed timber project in Chile.

June 1998: Several Chileans make an offer before the Ministry of National Goods to purchase the the fiscal estate Roll Nro. 2114-29 as a measure to stop the destruction of the archaeological site. In July the Ministerial Regional Secretary of National Goods rejects the request.

June 1998: The Chilean government and the Demócrata Cristiano (DC) party support the chip project (Llanquihue Daily Chronicle, June 26).

July 28, 1998: The local newspaper Llanquihue publishes an editorial supporting the "Ilque and the hen of gold eggs" and attacking the opponents as "ecoterroristas." Cascada Chile takes out advertisements distorting citizen opposition.

August 1998: citizens of Puerto Montt accuse the president of Corema (Regional Commission of the Environment) and the Intendente of the region of Los Lagos (Rabindranat Quinteros) of being prejudiced in favor the project (Llanquihue, July 8).

September 1998: The Cascada project is accused in the court of appeals of Puerto Montt of destroying archaeological sites more than 5,000 years old. The judicial complaint was presented by the House of Tourism of Puerto Montt, by the deputies Arturo Longton (RN); Guido Girardi (Ppd); Alexander Navarro (Ps), the Association of Industralists of the Tourism, and the president of the Committee of Ilque, and Marcel Claude (Economist of Terram Foundation).

September 1998: Forest Police (OS-5) accuse CIPM and its legal representative Robert Crawford (Boise Cascade) of illegal cutting and asks for the corresponding fines (Part Nro. 12. Second Court of Local Police. Puerto Montt).

September 1998: The Municipality of Puerto Montt asks the department of forestry at the University of Conception for a study of the impact of the project. Public relations firm Burson Marsteller, contracted by Boise Cascade y Maderas Cóndor S.A. (Chile Cascade), distorts the findings of the technical study (Llanquihue Chronicle, Sept 3), but two days later the foresters of the University of Conception clarify this manipulation of their technical report and declare that the project is unsustainable.

September 1998: Deputies of the House of Representatives visits Ilque to present its opposition to the Cascada project criticizing the Forest National Corporation (Conaf) for irregularities at the local and regional level. CIPM pays more than 20 farmers to demonstrate against the deputies.

September 1998: Cascada Chile invites members of the Regional Council (Core), Councilmen (Luis Eagle of RN and Osvaldo Wistuba of the DC), the press (Katherine Bopp of the Daily Llanquihue and TVN) to visit the Voyageur OSB facility in Barwick, Ontario, Canada.

October 1998: Cascada coordinator Alexander Larenas claims that the Forest National Corporation gave its verbal authorization to cut. Conaf claims it can control the operations of the project (Llanquihue Chronicle, October 10).

October 1998: CIPM, represented by Miguel Aylwin Oyarzun (son of Patricio Aylwin, ex-president of Chile), asks the Service of Geology and Mining of Chile (Sernageomin) for four mining concessions covering 1,100 hectares in Ilque without informing to the Commission for the Environment.

November 1998: Cascada Chile coordinator Alexander Larenas is dismissed for endangering the project with his aggressive attitude. He assumes the position Italo Zunino (Jr).

Numerous lawsuits were filed against the project; as of April 16, 1999:

1. Administrative lawsuit by salmon industry.

2. Constitutional provision against the resolution that approved the project.

3) Criminal lawsuit by the Green Caucus for harm to the archealogical site.

4. Constitutional provision for affecting the right to live in a clean and unpolluted environment; filed by FIMA on the behalf of NGOs, small farmers, scientists, and local people.

5. Another lawsuit by the state for bulldozing the archaeological site (Augustin Ramirez).

In May 1999, the Court of Appeal fined Cascada Chile $825,000 for destroying a 5,000-year-old archaeological site, to be added to a fine for illegally cutting trees.

February 2001: Boise Cascade announced it was cancelling the Cascada project.

 

China

Boise Cascade has signed a $13 million joint-venture agreement with Shenzhen Leasing to manufacture and sell carbonless paper in China under the name Zhuhai Hiwin Boise Cascade Specialty Paper. The manufacturing will be done at a 3,000 ton per year facility in Zhuhai which Guangdong acquired from Hiwin Paper Mills. An additional plant will be built and operated. "[The] aim is to meet increasing needs in China (now 100,000 tons per year and expected to grow 15 percent annually) and elsewhere in Asia. 'China's per capita paper consumption is growing faster than anywhere else in the world,' said Boise Cascade chairman George Harad. Boise will hold 60 percent of the equity and Shenzhen the rest.

 

Mexico

After overcutting the west side of the Payette National Forest in the Weiser Ranger District and lands to which the corporation holds title -- and then closing its Council, Idaho, mill in 1995 -- the company moved some of the equipment to Guerrero, Mexico. Boise Cascade's Mexican subsidiary, Costa Grande Forest Products, began operating a mill in Papanoa, Mexico, in the state of Guerrero, with logging rights to a million acres of old-growth. In June 1995, a protest by farmers about timber cutting left 17 farmers dead and 20 wounded by the police. The state governor resigned and 28 police officers and four officials were jailed. Boise Cascade pulled out of this operation in 1998.

In 1995, Boise Cascade closed its mill in Council, Idaho and moved some of the mill equipment to Papanoa, Guerrero, Mexico, where its wholly-owned subsidiary Costa Grande Forest Products had rented a formerly state-owned sawmill, and supposedly had exclusive logging rights to a million acres of old-growth pine from the local ejidos (land communes), at a price of $60 a cubic meter -- three times what the local mill had been offering. The plan was to cut 100 million board feet over five years, for export to the United States, and operating a second mill in nearby Tecpan. Boise Cascade was paying Mexican workers $4.75 per day. In June 1995, a protest by farmers about timber cutting left 17 farmers dead and 20 wounded by the police. The Guerrero state governor resigned, and 28 police officers and four officials were jailed. Boise Cascade pulled out of this operation in 1998, "due to an inconsistent and seasonal wood supply."

Russia

 Boise Cascade sells Russian lumber to customers in western Europe.

 In the 1960s and 1970s, Boise Cascade's international operations included paper operations in Guatemala and Costa Rica, Guatemala; Italy, Japan, Saudi Arabia, Spain, Turkey, Venezuela, Algeria, Argentina, Brazil, England, Greece, and India., a half-interest in Miramichi Timber Resources, world pulp supplier, New Brunswick, Canada, Triplex Pizano (Columbian plywood and particleboard), Bataan Pulp & Paper Mills and Zamboanga Wood Products (Philippines), and Ebasco Industries (1969 merger of Electric Bond & Share with Boise Cascade; sold in 1973), and electricity production in Chile, Cuba, Ecuador, Panama.

 

Labor Issues

Boise Cascade had 22,154 employees at year-end 1997. Mill closures and corporate restructuring reduced employment from 35,000 in the 1980s; strikes were bitter in Maine and the Midwest.

According to the Council on Economic Priorities, since 1988 Boise Cascade has been charged with 350 "willful" negligence violations of worker safety rules.

In 1989, when Boise Cascade hired BE&K as a non-union general contractor for a $535 million paper mill expansion in International Falls, Minnesota, union members held a wildcat strike, demonstrations mounted, and arson destroyed temporary housing set up for construction workers, and police used tear gas to stop a protest in which rocks were thrown and cars were overturned.

In July 1998, Boise Cascade Corporation announced the closure of three US sawmills in Oregon, Idaho and Louisiana and a plywood plant in Washington -- closures which will cost nearly 500 people their jobs. A third mill in Yakima, Washington will be closed in 1999.

  

Subsidies

 Boise Cascade ranked in the top ten recipients of industrial property tax abatements from 1988- 1997:

Company

Jobs created

Total taxes abated

Exxon Corp.

305

$213,000,000

Shell Chemical/Refining

167

$140,000,000

International Paper

172

$103,000,000

Dow Chemical Co.

9

$96,000,000

Union Carbide

140

$53,000,000

Boise Cascade Corp.

74

$53,000,000

Georgia Pacific

200

$46,000,000

Willamette Industries

384

$45,000,000

Procter & Gamble

14

$44,000,000

Westlake Petrochemical

150

$43,000,000

 

Environmental Record

 

The Boise Cascade and the Environment booklet (March 1997) and the nine one-page Environmental Perspectives factsheets (June 1997) contain claims about environmental progress at the company -habitat enhancement, endangered species, clearcutting, air and water quality, and toxics reduction.

  

Toxics

As of the end of 1993, Boise Cascade had been notified that it was a potentially responsible party at 53 federal or state-listed hazardous waste sites. At the end of 1995, Boise Cascade admitted it had "open issues" at 38 sites where it was a potentially responsible party (PRP). At the end of 1997 and 1998, Boise admitted to 33 federal or state hazardous waste sites. The company annually claims that clean-up costs will not have a "material adverse effect on its financial condition" even though its expenses to deal with pollution sometimes exceed its profits. The company claimed to spend $17 million on pollution abatement in 1995, and expected to spend $32 million in 1996; it claimed it would have to spend $200 to $300 million over several years to comply with 1997 EPA rules for utilizing the best pulp and paper technology for reducing toxic bleaching emissions.

 

Sustainable Forestry

Boise claims to practice clearcutting on less than 20 percent of the land it cuts each year.

The following text is from two recent news releases by Boise Cascade.

August 8, 2000: "Boise Cascade Corp. announced today results from an independent, third-party audit to certify approximately 300,000 acres of timberland located in the company's Western Oregon Region. The audit, performed by PricewaterhouseCoopers from May 29 to June 8, 2000, certified Boise Cascade's full compliance with the American Forest & Paper Association's Sustainable Forestry Initiative (SFISM) Program standards and assessed the company's proprietary Forest Stewardship Values and Measures. The audit examined forest management practices on timberland owned and managed by the company and on private and public land from which Boise Cascade purchases timber."

October 24, 2000: "Boise Cascade Corp. announced today results from an independent, third-party audit to certify approximately 200,000 acres of timberland located in the company's Idaho Region. The audit, performed by PricewaterhouseCoopers LLP from August 28 to September 1, 2000, certified Boise Cascade's full compliance with the American Forest & Paper Association's Sustainable Forestry Initiative (SFI(SM)) Program standards and confirmed compliance with the company's proprietary Forest Stewardship Values and Measures. The audit examined forest management practices on timberland owned and managed by the company and on private and public land where the company harvests standing timber. Accompanying the audit team as observers during portions of the audit were six representatives from Boise Cascade wood products customers and two members of the independent Forest Stewardship Advisory Council. The independent Forest Stewardship Advisory Council is composed of nationally recognized conservation experts who have agreed to advise Boise Cascade on forest stewardship enhancements. Council members are: George Brown, Ph.D., dean emeritus, College of Forestry, Oregon State University; David Thorud, Ph.D., dean emeritus, College of Forest Resources, University of Washington; and Jack Ward Thomas, Ph.D., professor of wildlife biology, University of Montana School of Forestry, and chief emeritus, U.S. Forest Service."

 

Political Activities

Wise Use Funding

"In August 1988, the Center for the Defense of Free Enterprise (CDFE) held the Multiple Use Strategy Conference in Reno, Nevada. This event launched the "Wise Use" Movement and established CDFE director Ron Arnold as its premiere spokesman and leader. The conference brought together representatives of natural resource industries, right-wing leaders, recreational vehicle users and members of pro-industry "citizens groups' cultivated by Arnold. From these diverse constituencies, Arnold fashioned a coalition whose purpose, he said, was "to destroy the environmental movement." The strategy was to provide corporate funding and support for "citizens" groups that both advanced the agendas of Arnold's industry clients and offered them a populist veneer. Following the conference, Arnold and his boss Alan Gottlieb produced and published what became the movement's bible, The Wise Use Agenda, which listed the top 25 Wise Use goals. Exxon, Louisiana-Pacific and Boise Cascade were among the corporations listed in a directory of the movement found at the back of the Agenda" and Boise Cascade was among the founding funders of the Center itself.

Boise Cascade continues to fund wise use groups including the Blue Ribbon Coalition and joined snowmobile groups in their lawsuit against protection of national forest roadless areas.

Political Money 1997-1998

Lobbying expenditures: $576,500

PAC money contributions: $55,000

Soft money contributions: $16,000

 

Shareholder Resolutions

1995

California Public Employees' Retirement System (CalPERS), one of the largest funds in the United States with nearly $100 billion in assets, introduced a resolution to end staggered terms of directors. Not approved.

1997

Resolution to reincorporate from Delaware to Idaho. Not approved.

2000

Resolution to elect directors on an annual basis in order to improve board sensitivity to important shareholder issues. Approved by shareholder vote.

Legal Proceedings

Like most large corporations, Boise includes a statement that reveals its attitude toward criminal and civil liabilities: "We are involved in various litigation and administrative proceedings in the normal course of our business. In the opinion of management, our recovery, if any, or our liability, if any, under any pending litigation or administrative proceeding... would not materially affect our financial condition or operations." 

Boise Cascade Corp. v. U.S. EPA, 942 F.2d 1427, 1432 (9th Cir. 1991).

Valerio v. Boise Cascade Corp., 80 F.R.D. 626 (N.D. Cal. 1978), aff'd, 645 F.2d 699, 700 (9th Cir.) (adopting district court's opinion), cert. denied, 454 U.S. 1126 (1981).

Boise Cascade was "recently awarded $1.8 million by an Oregon jury, in a suit it filed against the state seeking compensation for having been prevented from harvesting timber where a pair of spotted owls nested. The state has appealed."

Numerous lawsuits arose from the proposed oriented strand board facility in Chile; see Chile section above.