Forestry and timber products leader Weyerhaeuser has announced its COVID-19 response plan, which includes reductions in lumber, OSB, and engineered wood production.
“Given the broad-based uncertainty regarding the ultimate economic impact of the COVID-19 pandemic, we are taking action to position our businesses for changing market dynamics and prudently enhancing our financial flexibility,” Devin W. Stockfish, president and CEO, said in a news release.
“Weyerhaeuser is operating from a strong financial position, and we have demonstrated that the company has the cost structure, agility, and resilience to deliver industry-leading performance through rapidly changing market conditions. I am confident that we are well positioned to manage through this disruption and extend Weyerhaeuser’s track record of creating long-term value for shareholders,” Stockfish said.
Weyerhaeuser will lower lumber production by 20 percent, OSB by 15 percent, and engineered wood by 15-25 perent. All reductions will be temporary.
The company says it's working to mitigate supply chain disruptions and slower log deliveries to Asia. It's also reducing capital expenditures for the year by $70-90 million.
Weyerhauser has seen its sales decline nearly 20 percent since late 2018. It sold 555,000 acres of Michigan timberlands for $300 million in cash in September 2019. It also sold its Montana timberlands for $145 million last December. The company believes both sales will help boost profits.
Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. The company owns or controls approximately 12 million acres of timberlands in the U.S. and manages additional timberlands under long-term licenses in Canada. The company also is one of the largest manufacturers of wood products, and a real estate investment trust. In 2018, Weyerhaeuser generated $7.5 billion in net sales and employed approximately 9,300 people who serve customers worldwide.
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