The new Baxter Reformulating a 1O0-year-old treater

ElSTABLISHED in the late 1800s I-land now reportedly the West Coast's largest treating company, J.H. Baxter, San Mateo, Ca., was led by three successive generations of family members until the death of Al Baxter in November 1992.

A year later, the board finally decided that Al's son, Richard, should take the helm. "It may have seemed premature," noted one spokesman close to the company, "because in 1992 neither Al nor Richard (then 32) thought he was ready to run the company."

But, supported by his sister, vice president Georgia Baxter-Krause, the results have been very positive. Observers note that the company is in solid shape financially, and sales are growing. President and chief executive officer Richard H. Baxter related to The Merchant Magazine how he is positioning the company for the future:

The Merchant Magazine Do you see a bright future for the forest products industry in general and, more specifically, the wood treating industry in the U.S.?

Richard Baxter In a word, yes. What other building material has all the attributes of wood? It is renewable, recyclable and an environmentally sound choice. If we can continue to communicate this message to the consuming public, I see a very bright future for the wood products industry. As for the wood treating industry, we exist to add value by protecting wood from wood destroying organisms, thereby extending the life of wood and helping to enhance the utility of this valuable natural resource.

The Merchant What kinds of chal- lenges does our industry face in the future?

Baxter Our greatest challenge is to protect the true image of our industry. People are barraged with the concocted benefits of alternative products, most of which utilize non-renewable resources, consume massive amounts of energy during the manufacturing process and are often more expensive than wood. As an industry, we must also work to strike a balance with environmental concerns by understanding what the concerns are, by using good science and good judgment and by focusing on the facts. Our industry needs to continue to deliver our message to the court of public opinion.

The Merchant How does J.H. Baxter fit into that picture? Do you have a vision of where you want to take the company?

Baxter J.H. Baxter has always been an industry leader. We continue to be proactive in dealing with the issues I've just described. As far as our vision for the future of J.H. Baxter, it's very simple. We are, and will continue to be, the best there is in our field in terms of our products and the value we deliver to our customers.

The Merchant What changes have you made or are you making to move forward toward that vision?

Baxter Change is a way of life for any company that expects to be the best. If I tried to list the changes we've made during the past year, you wouldn't have room to print them. The point is, we try to do something every day to improve our products and our service for our customers. For example, we are in the process of upgrading our companywide computer system to enable us to respond most efficiently to our customers' needs. Another example of our commitment to continual improvement is our investment in modern drying systems for two of our plants. These projects combined total more than $l million in capital improvements for this year alone. We are a strong and growing company, and our efforts to continually improve everything we do will keep us strong and growing in the future. t-

The Merchant Is it dfficult to implement serious changes at a 100-yearold company? Was it hard to sell your new ideas to those who have been with Baxter for many years ?

Baxter Change is always a challenge, but in this company it isn't as difficult as one might expect. Our approach has been to flatten the hierarchy of management and do away with the bureaucracy that cripples so many companies. We've created an atmosphere which allows everyone to be part of the process of continual improvement. Our people know what needs to be done and are often better equipped to affect change than I am. My approach has been to give direction, then get the hell out of the way.

The Merchant You're a young man. What qualifies you to head up one of the largest wood treating companies in the Western U.S.? Has your youth been a help or hindrance in leading the "new" Baxter?

The Merchant What kind of industries currently are your biggest customers? Do you see that changing in the future?

Baxter Our customers, and their customers, are the commercial and industrial end-users of quality treated wood products. These customers require their treated products to meet or exceed industry standards and the mandates of the building codes. From a distribution chain standpoint, you will only find Baxter treated products in those niche or "upscale" retail lumber yards that supply the contractor with products which meet the code requirements.

As for future changes, I hope that our continuing research and development of new preservative systems will allow us to expand into products we are not currently handling. However, I will only place the company name on

Story at a Glance

Baxter head discusses challenges, opportunities of recreating century-old treating firm.

products which meet recognized treating standards and perform properly for their intended use.

The Merchant What makes your company dffirent or better? What are the company's greatest assets?

Baxter There is no question that what makes us a better company is our people. And, clearly, our people are our greatest asset. Having literally grown up through the company, I have personally seen the dedication of our employees to the company, to the Baxter family and to our customers. Many of our long-term employees have played a major role in my personal development. Over the last several years, I have had the pleasure of hosting retirement parties for individuals that have served our company for 40 years or more. That, in and of itself, speaks volumes about the dedi cation of our people to our company and our customers. I personally believe we have one of the finest organizations anywhere, and it is our people that make the difference.

The Merchant What are your thoughts on the continuing environmental Dressures on industm?

Baxter It appears that the pendulum is beginning to swing in favor of industry. My fear is that it could swing too far, too fast and send us careening back into the quagmire from which we now seem to be emerging. I personally support a proper balance between industry and environment. I believe in good science, good judgment and a willingness to compromise on issues that affect people from many walks of life. In the end, we must all do what is right.

As we have in the past, our company will support a continuous search for new, more effective, more efficient wood preservation systems. We have made and will continue to make great strides in our quest for new treatment technology.

At J.H. Baxter, we are always conscious of our responsibility of stewardship of our natural resources. An example can be seen in the management of our company-owned timberlands. These timberlands, some of the finest in the West, have been meticulously cared for by four generations of the Baxter family. I look forward to the day that the fifth generation of our family will become the stewards of these precious resources.