Upbeat attitude will win

By H. P. (Hank) Sandstrom Vice President and General Manager Simpson Redwood Company

flu* REDwooD operations

Yare heading into what appqrs to be a down-tick 1986 market with a very upbeat attitude.

As reported earlier, our company is investing$13million to upgrade its Korbel sawmill into one of the most efficient and productive in the industry. This, in addition to $15.7 million already spent at Korbel since 1979, represents a lot of management confidence in the future of our redwood part of the North American lumber industry.

And that industry has its problems in the marketplace where 1986 looks almost like a rerun of 1985. Housing starts for 1985 are now projected at an annualized 1.7 million. For 1986 they are projected at 1.65 million with a slow first half and an upsurge in the second.

Not too many years ago that many starts was considered a pretty fair market for industry. That's not so anymore due to dramatic increase in capacity and equally dramatic shifts in where the lumber is coming from.

In 1970 U.S. and Canadian mills produced 38.343 billion board feet of lumber. In 1984 that volume reached 52.742 billion board feet with much of the production coming on stream

Story at a Glance

Down.tick market...rerun of '85...supply outstrips market ...Canadian lumber will remain strong...aggressive, crealive marketing backed by eflicient, cost€ffective manufacturing is the answer.

during the housing heydays of the late 1970s.

Today, supply capacity significantly outstrips market demand.

U.S. lumber producers have felt a further impact fromtheshift in supply sources. Canadian lumber which shared 30.7s/o of the North American production during a 1970-1974 five year period jumped to 40.30/o during a similar period ending in 1984.

Despite these factors the outlook is not all that gloomy for those willing to work for it and our marketing team looks to the future with confidence.

The answer, they say, lies in aggressive, creative programs to recapture some of the markets lost to substitute products, treated pine decking and importsall backed by an efficient and cost-effective manufacturing system.

That's the name of the game.

He who produces the best product at the least cost will take the winner's cup.