Vertical Gonsolidation:

tAll Eyes On The Georgia-Pacificl$outheast Wood Partnership

II N PART, the widespread consolidation in the building materials industry is being driven bY America's fancy for big box retail.ers, A handful of retail giants Produce such a large percentage of sales that they can dictate terms to their suppliers. The retailers cut out middle men and squeeze other vendors' rnargins so tightly that suppliers are forced to band together to survive and compete.

But the consolidation is occurring not only within each level of the industry, but also across traditional lines of distribution.

Southeast Wood, the main supplier of treated products to big box behemoth Lowe's Cos., had purchased much of its white wood from G-P. Now, through a unique Partnership deal, G-P is a customer of Southeast Wood.

Georgia-Pacific pays to Put its inventory through Southeast Wood's treating facilities and has taken over sales and marketing for the treater. Southeast's sales and customer service personnel now work for C-P.

G-P, according to one analYst, "saw the handwriting on the wall. The treaters would go out and make a deal with the retailer, then come back and have to beat uP on the suPplier to get the price theY want."

A vertical company, G-P has vast timberland holdings and a network of mills and distribution centersbut owns only two treating facilities. Southeast Wood is the nation's third largest treater, with eight plants in the South and Midwesl

"Georgia-Pacific is a very Powerful, well known name," saYs Fran Giknis, Gf marketing services man- ager for building products- The Southeast deal "allows us to brand treated lumber and leverage the strength of the G-P name in the treated lumber business."

Southeast's customers are now G-P's. The deal also allows Southeast to lock in a white wood supplier, and provides both firms with more control over costs.

Southeast continues to buY a small amount of wood from other suppliers-"to get the product mix the customers want"-but G-P's goal is eventually to be able to Provide everything the retail accounts need.

G-P also continues selling wood to other treaters.

Other producers and treaters are keeping a close eye on the success of the G-P/Southeast Wood partnership-and several reportedlY are exploring similar deals of their own.

NAWLA president (1) Steve Boyd (right), with John Davidson at the recent Traders Market. (2) Jim Hassenstab, Debbie Langenfeld, pat Diederich,. Monte.Jensen. (3) Mark Dippel, Sam Howard, Teiri Adaii. (+) Joc_!r Voelzke, Michael Swiger, Allan Hurd. (5) Blair Huffman, Rob6 McOoleman, Denise Underwood, Mark Giles. (6) Ken Robinson, Robert Foreman, Danell Smith (7) Denise Xeyser. 1d;'ToOO Fox, Tom Meyer. (9).Thom Wright, Kris Lewis. (10) E.J. Langtey, Mike Gites. (11) Neil Nakamura, Jack Burnard, Eddie Smalling, Deari Duchi, Brett Siaulhter.

Bulluxc Pnolucrs Drcnsr Drcevern 1998

(-12) K.qn Fowlel Tom Daniels. (13) Danny Miiler, Notan Schweikt. (14) Doug.Holt,.Z_qe-Ialtos, Jan Kirschner. (15)Jim Malloy, Tim Bradley, Ric( Palmiter._(16) Steve Snavely, Dennis Downer. (17) Herb york, Larry Petree. (18) Richard Bartsch, Mindi Spencer, Tonv Darlinq. (19) Randv .C_qllilsr..Pglg Henningleld, Joe Rodrick. (20) Carot Ptpt<ins, BudOl rtumti, (21)_Bill O'Ban1o1, Chuck Bloom, Dave Cunningham. (22) Biily Gunn, Dan Thornton, Bob &etz. (23) Mike McKanna, trleg a aitilttittoy.' (More photos on next two pages)

NEARLY 1,500 attended NAWLA's 3rd annual Traders Market, including (1) Michael Panella, Jerrv Lonq, Janet Pimental. (2) Greg Carter, Tom W'arnock. (3) Steve We6kes,J.J. Tomjack. (4) Roy Seammell. Jim Steinlicht, Ve'rne Sheldon. (5) Zee Taltos, Gary Webb, Dave Curda. (6) Jeff Comiort, Pat Colgan, Greg Kruse. (7) Darrel Garoulle, Brad Bower. (8) Alan Beaudoin, D'enise Laviqne. (9) Matt Duprey. Russell Coulter. k6vin Hancock. (10) Roy Shaffer. Steve Winebrennet Steve Culbertson' Bob Peterson. itt) Aiit Wood, Fagan Cox. (12) Doyal Marks, Neal

Youno. (13) Craiq Larsen, Barbara & Ron Wilson, Eddie Pearce. (14) Patrici Speil, Joh-n Haqqertv, Joe Haggerty. Jim Spell. (15)John Picot. Barrv Schneider, Wavne Knutson. (16) Bill McGovern. David Weinstein' (17)'Jim Outram, Allison Koppel. (18) William Gunnell, Greg Hexberg. itgi CtauOe Scott, Ed Lanqlev, Greq Mitchell. (20) Bryce Piggot, Dave koirar. Tom Bead, Ed Burke.-(21)Jim Sloan. Chris Close. Roger Clark. Steve Webb, Perry Nydigger, Lee Aquilanti.

(More Photos on next Page)

DALLAS, Tx., was the site of NAWLA's Nov. 5-7 Traders Market (continued from previous pages). On hand: (1) Jeny Gustafson, Lee Roy Jordan. (2) Willie Goynti, Joe McNeet. (3) Larry Audette, Jim Collins. (4) Bick Fischer, llghard Figura, Gene Baker. (5) Steve Bush, Bill Hurst. (6) Mark Nizic, John Grove, Scott Driskill. (7) Marty Hawkins, Tom Huting. (8)

Len Williams, Art Bructon. (9) Joe Godfrev, Lee Ashburn, John Hall. (.t0) Beverly Dirl Grosso, Barbara Clausen, Jan Griswold. (11) Joe Hums, Chris Weiss. (12) Karl Krauter, Rick Hogue. (13) Kyle Keaton, John Snead. (14) Don Juslice, Terry Griffirh. (15) Rod Nichbts; Terry _Clark, Ken Caylor. (16) Terry Baker, Chad Bailey. (17) Phiilip Gee, Bructi Cheng,

Chad Findlay. (18) Sid Hottender, Phit Dodson, Bob Carlson. (19) Bailev Crump, Greo Watts. Joe Klohs, Mario Marchi. (20) Mark iunkins. Charlie Quarles. (21) Matt Prince, Randv Dover, Waren Glenn, Stacy Fisher. (22) Pete'r Stoyanov, Johnny Konecny, gitt HetlanO.