Steve Rogel, Chairman, President and CEO of Weyerhaeuser Company, made this presentation at annual LFA Convention in Alexandria August 27.

Weyerhaeuser employs more than 2,100 people at 18 manufacturing operations and offices in Louisiana.

Our capital investment in your state is significant. From 1998 to 2002, we invested more than 61 million dollars in our Louisiana operations.

Our presence in Louisiana greatly benefits from our relationship with professional loggers. For us and for other timberland owners, loggers are a critical partner in land stewardship. This is true because many of the SFI criteria depend on the harvesting process. We depend on you to assure that streamside management zones are handled correctly, and that harvesting makes the least possible impact to water and soil quality.

As you know, environmentalist groups have gone to the marketplace, asking our customers to prove the wood products we supply are grown and harvested in a sustainable way.

Both industrial and non-industrial private landowners are able to assure their compliance with sound environmental practices through certification programs such as SFI and the American Tree Farm system.

The continuing education and professionalism of independent loggers play a key role in such certification programs. Your participation is essential if we are to meet demand for sustainable forest products.

As you work with your customers ... the landowners and manufacturers ... the Louisiana Logging Council can help with many of today's challenges.

A prime example of continuing education is the Louisiana Master Logger program. This type of training assures landowners ... especially us at Weyerhaeuser ... that they have chosen loggers who know their business and know the importance and impact of best management practices on the land.

Your work with innovative and low impact harvesting techniques, like cut-to-length logging is another way you can work with landowners to reduce impact on the land and meet sustainability goals. We commend you on these programs which add to our high level of confidence in today's professional logger.

Safety is another key area where we can work together. Safety is top priority at Weyerhaeuser, and we seek out contract loggers that share that value. We believe OSHA program continues to help reduce accidents. You should be proud that this program began in Louisiana.

One subject Clyde asked me to talk about today is the global marketplace and how it affects us.

Today, we all compete in a global marketplace.

With that in mind, here are some facts for you to ponder:
* Substitutes for wood - such as steel, plastic and cement - have made serious inroads into some of our product lines. Our industry is taking action which I'll describe later today.
* Currently, there is flat to declining demand for many wood and paper products here in the U.S. ... although the world market is growing and long-range forecasts encourage us to continue investing in our forestlands.
* In the past, the strength of the U.S. dollar has significantly hurt U.S. competitiveness vis-a-vis European and other providers.
* We're dealing with a global recession.
And here are some additional concerns the forest products industry faces:
* Real prices for many of our finished products have been declining over time.
* One can grow trees faster and for less cost in the Southern Hemisphere. Not only is the Southern Hemisphere producing fast growing trees, such as eucalyptus, we're seeing loblolly pine being grown on a 22-year sawlog cycle. That's more than double the growth rate in Livingston Parish.
* We also face much greater environmental and other regulatory constraints than producers in many other nations do.
* Finally, countries that once imported many American wood and paper products are now either sourcing them from other countries or developing their own capabilities.

Now, looking at the facts I just enumerated, let me ask you: What does the future of the American forest products industry look like? Not as rosy as we would like. But we shouldn't throw in the towel. We do have some advantages: skilled labor ... competitive freight costs into home markets ... some of the highest-value tree species in the world ... products that are certified to have come from sustainable forests ... great forestry schools ... an entrepreneurial spirit ... and - many of the best foresters - and loggers - in the world.

To compete, however, companies like Weyerhaeuser must continue to drive costs down in our manufacturing and in our forestry practices - i.e., do more with less.

In this regard, we need to continue improving the growth rates and commercial attributes of the trees we grow for wood and paper production. We're an innovative people. We can do this.

A second thing we can do is advocate for equivalent environmental regulations worldwide - regulations which ensure effective stewardship of the world's working forests. American forest products companies should not be penalized in the marketplace for achieving high standards of forest stewardship.

One of the movements that's helping level the playing field is the push for certification of forests and forest products.

As one might expect in a democratic society, there is debate over whose standards should prevail. As you know, Weyerhaeuser is a supporter of AF&PA's Sustainable Forestry Initiative standards - or SFI.

My interest is to make sure that the environment is protected ... that American forest products can compete ... and that American forest owners can control their destiny.

If we are prohibited from doing so, not only the forest products industry, but our nation's forests, will suffer

Yes, it's a tough market, globally and otherwise, for many aspects of the forest products community, including the logging sector.

How can we keep loggers like yourself - who have faced increased costs and reduced prices - in business and logging our mills in the future?

I am sure you've learned the same lesson which we have: that our operations have to run as efficiently as possible to be competitive and stay in business. That's become a standard for our company and it's probably had to be for yours, too.

End-users like Weyerhaeuser can help you succeed in small ways ... like providing a better turnaround time at the mills for log trucks ... that allow for that critical extra run from the woods every day.

And, programs like Weyerhaeuser's Contractor Management System encourage maximum production from equipment in the woods to increase efficiency and reduce costs

Also, the resources of the logging council are here to help your businesses.

Another question I've been asked is: What about the future of the timber market in Louisiana and the South?

In Louisiana and the South, landowners are seeing fluctuating prices on both pulpwood and logs. As a commodity, market timber price is dependent on many factors. Wet weather has added to the uncertainty on the raw materials market this year, as you well know.

I know that Weyerhaeuser will need to continue to purchase logs and pulpwood on the open market, to complement production on our own lands.

But, I am not here to predict the timber market.

However, I do predict that the partnership between the professional logger, landowners and forest products companies will continue to grow and prosper.

As demand for "certified" wood products and building materials increases in the marketplace, the loggers' role in the chain of custody of timber becomes more important. Highly trained, certified master loggers will be key to the certification of all our wood ... including gate wood ... to the nation's wood product manufacturing facilities.

This is an exciting partnership in challenging times. But by working together, we can build a successful tomorrow for our employees, our customers and our communities.

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