Weyerhaeuser, Hanson Cut Deal U.S. Timber Company Buys Southern Forests, Sawmills For $500 Million

Hanson PLC, the Anglo-American industrial conglomerate, said Wednesday it will sell forests and sawmills in the southern United States to Weyerhaeuser Co. for $500 million.

Hanson said its subsidiary Cavenham Forest Industries will sell 661,200 acres of timberland in Louisiana and Mississippi, as well as four sawmills that last year produced 500 million board feet of lumber, as part of the deal with Federal Way, Wash.-based Weyerhaeuser.

Integrated timber giants such as Weyerhaeuser have looked toward the Southeast as the future of timber production in the United States.

As legal entanglements and environmental restrictions have made Northwest timber much harder to cut, large timber companies have found the timber-friendly South and its faster growth cycle for pines and pulp trees far more accommodating.

A gradual reshifting of the wood products industry from the Northwest to the Southeast follows a traditional migration of the timber industry. The nation’s wood originally came from the Northeast, moved to the Great Lakes states and eventually to the Northwest.

Weyerhaeuser currently has 1,700 employees in Mississippi and Louisiana, and said it plans to retain about 400 Cavenham workers associated with the new operations.

Its current Mississippi operations include 276,000 acres of forestland, two lumber mills, a plywood mill, a draft paper mill, a lightweight-coated paper mill, a modified pulp fiber plant, two containerboard packaging plants and two railroads. In Louisiana, it has a wholesale building material distribution center near New Orleans.

This is the first announced disposal since Hanson said in December it would sell all of Cavenham’s U.S. timber and sawmill operations.

Before this sale, Cavenham had about 1.75 million acres of timberland in Louisiana, Mississippi, Oregon and Washington and was the eleventh-largest U.S. lumber producer.

“This puts us ahead of schedule and is an excellent start to crystallizing shareholder value,” said William M. Landuyt, chief executive of Hanson Industries, the conglomerate’s U.S. arm.

Talks are continuing for the disposal of Cavenham’s other assets in the Southern and Northwestern United States, Landuyt said in a statement.

Last month, Hanson announced plans to divide itself into four separately traded companies, focusing on tobacco, energy, chemicals and building materials.

, DataTimes