Healthier atmosphere for building products

By Ronald P. Hogan Senior Vice President. Distribution Div. Georgia-Pacifi c Corporat ion

!.rr. l.rE seconq narr or rne 6us

I we foresee a healthier atmosphere for planning building products manufacturing and distribution opera- tions. Although no single construction segment will probably at- tain record heights, the combination of all markets will pro- vide fertile grounds for expanding sales and profitability.

As a result of low and less cyclical interest rates, we believe housing starts will remain relatively strong with less fluctuation between the high and low points. Housing should average between 1.4 to 1.8 million starts between now and 1990. For 1986, housing starts should range between 1.6 to 1.7 million starts.

Continued strength in residential repair and alterations will provide the cushion against sales and profit declines in the off years for housing and will be the stimulus for significantly better sales and profits in the strong building years.

Although in the near future business may be weaker in the commercial and industrial areas, these markets provide added value and make us less vulnerable to swings in housing. We will continue to develop these kinds of alternatives for generating higher return to stockholders.

Along with pursuing sales into all

Story at a Glance

Fertile market for sales and protit ...less fluctuation in housing... 1.6 to 1.7 million starts...plants must modemize.

areas of the construction market, modernization and expansion of plants are necessities for keeping price and quality competitive in today's aggressive marketplace. The recent opening of two Georgia-Pacific state-ofthe-art OSB mills in Grenada, Ms., and Skippers, Va., is ample testimony to the fact that we believe in this type of progress.

A possible negative impact on business that we foresee next year is the effect of pending tax legislation. However, because of our market diversity and the strong position we have with those customers serving the d-i-y market, we believe a tax revision affecting housing would have less impact on us than others in our industry.

By developing superior distribution into all markets, not just those reliant upon housing starts, and by constant modernization of our plants and facilities to keep up with the latest technology, we think the chances are excellent for generating sales and profit growth in the '80s.