LP was incorporated on January 5, 1973, as part of a court-ordered monopoly breakup of
Georgia-Pacific. LP acquired several lumber companies in California, Oregon, Montana,
Washington, Missouri, and Alabama, and, in 1976, it purchased the Fibreboard Corporation, a manufacturer of products used in making furniture and cabinets. In 1979, the company bought fifteen building-material centers in southern California from Lone Star Industries, which provided LP with much needed distribution centers. Instead of relying on old-growth timber, LP found ways to make structural building products from small-diameter, fast-growing trees. this product was developed as an alternative to plywood sheathing and sub-flooring. After opening its first Inner-Seal mill in 1980. LP also manufacturers industrial wood products, such as hardboard and medium density
fiberboard. Along with wood products, the company also produces cocoon
cellulose insulation, plywood, and
pulp manufacturing. The company controls over 950,000 acres of timberland, and owns plants in 29 states, as well as in Canada and
Ireland.
Expansion during the 1980s Source: LP responded to these developments by curtailing production at many of its plants and increasing exports of its specialty building products. The pulp market also experienced slowing growth in 1990. After a four-year period of rapidly rising prices, pulp manufacturers then faced eroding profit margins due to worldwide economic problems and larger than normal inventories. Although LP saw its own pulp sales and profits peak in mid-1989 and expected only a minor recovery in 1991, the company continued to operate three pulp manufacturing mills. One mill supplied paper pulp to non-integrated paper producers. A second mill produced dissolving pulp for manufacturers of rayon and cellophane products. The third and newest pulp mill, using a bleached chemi-thermo mechanical pump process, rintroduced changes to pulp production by eliminating the use of chlorine and operated in a completely closed system without discharge into neighboring water supplies. This mill marketed its output to manufacturers of printing and writing papers. LP recovered from the downturn of 1990. While its competitors struggled in the face of dwindling timber supplies, LP reported increased sales in 1992, 1993, and 1994. Much of LP's growth in the 1990s came through acquisition of other building materials companies, such as ABTco in the eastern United States and Forex in eastern Canada. According to the
Spokane Journal of Business, 'LP experienced growth because it had vigorously developed alternatives to dimensional lumber and plywood.' Indeed, Merlo told the
Wall Street Journal that 'technology'--not old-growth timber resources--'had proven to be [the company's] lifeblood.' Profits for 1992 were up 216 percent from the previous year, and in 1994, the company achieved an all-time high of $3.04 billion in sales. By that year, only one-third of LP's sales came from dimensional lumber—the studs and solid wood joists that frame houses—while over half its revenue came from OSB products, and another 20 percent from engineered wood products and pulp.
Lawsuits threaten Louisiana-Pacific's future In the 1990s, LP was the defendant in several lawsuits related to its simulated cedar Inner-Seal exterior siding. Foremost among these were lawsuits pertaining to its simulated cedar Inner-Seal exterior siding. During the 1990s, LP was the defendant in a major
class-action lawsuit over its OSB siding product known as Inner Seal, manufactured from the early 1990s through 1996. The company had initiated the class action lawsuit to speed up the process and, according to the judge presiding over the case, "got the most money to the most people in the quickest amount of time based on my experience." Many homeowners alleged that Inner-Seal siding, which carried a 25-year warranty, began to rot prematurely—discoloring, disintegrating, and even growing fungi. The first claims surrounded the use of OSB panels on the roofs of homes in Florida. Following
Hurricane Andrew in 1992 some of these homes lost shingles, exposing the OSB panels to heavy rains. Reports claimed that the exposed OSB began to deteriorate. Two years after the first suit, LP had settled all related disputes. LP re-engineered the product, now marketed as LPSmartSide and since 1997 has sold approximately 3 billion square feet of SmartSide siding with no warranty claims for fungal decay. Class-action suits brought by various collections of homeowners as well as the attorney general of Minnesota, were filed against the Inner-Seal siding. Although LP admitted to no wrongdoing, the company moved quickly to settle the cases. At the close of 1991, LP had paid over $22 million to settle OSB claims, and between 1993 and 1994, the company paid out an additional $14 million. In 1996, LP committed at least $275 million to a settlement with 800,000 homeowners who had used the Inner-Seal siding. LP's woes did not end there, however. In 1996, LP paid $65 million to settle a class-action lawsuit filed the previous year by LP shareholders who alleged that the company had 'violated securities laws by failing to disclose that the company's oriented-strand boards were defective,' as the Portland Oregonian reported on December 5, 1996. It was the largest securities settlement in Oregon history. Also that year, the company settled a 1993 sexual harassment suit against Merlo. Moreover, the state of Colorado brought a 56-count indictment against LP in 1995, charging fraud and environmental violations at its plant in Montrose, Colorado. The same year, LP's eight-person board 'lost confidence in the ability of Merlo and his top two lieutenants to steer the Fortune 500 company,' declared the August 4, 1995, edition of the Portland Oregonian. Merlo resigned and was replaced as chairman and CEO by Mark Suwyn, a former executive at
International Paper. All told, LP sold over $875 million of assets during the three-year period. 'The assets sales will do two things for us,' Suwyn told Business Wire. 'They will provide us with additional financial flexibility to grow the company and allow us to focus all our management attention on becoming the premier supplier of building materials.' Suwyn also concentrated on developing LP's specialty products lines. LP subsequently acquired several companies to expand its product lines, including Associated Chemists and GreenStone Industries in 1996, as well as GreenStone Industries, a manufacturer of
cellulose insulation, and Tecton Laminates Corp., a producer of laminated veneer lumber and wood I-joists used in the construction industry. Two years later, LP acquired ABT Building Products Corporation, a transaction it heralded as a way 'to expand its specialty products lines and complement its low-cost commodity building products,' according to the Wall Street Journal. In 1999, LP purchased Evans Forest Products Ltd., a Canadian manufacturer of engineered wood and lumber products. In 1997 LP unveiled its Advanced Technology Center, which provided the company with the facilities to conceive, test, and improve new offerings. LP soon introduced a bevy of new product systems, including Smart Start siding, TechShield energy-efficient structural panels, TopNotch flooring, and Cocoon insulation. A final prong of LP's rebuilding efforts involved improving operations. In 1996, the company instituted an intensive employee training course—Rapid Change Technologies—designed to enhance workers' communication skills and to empower them to accept new ideas with ease. To increase productivity, LP utilized Business Process Improvement technology to make its OSB mills more efficient. LP also sought to bolster the company's relationship with large and national home center chains, such as
Home Depot and
Lowe's. These 'superstores' represented the fastest-growing segment of the building industry. The outcome of LP's vigorous reorganization was not immediately evident. Sales for 1996 were 13 percent lower than in 1995, and resulted in a net yearly loss of $200.7 million. Although the company again operated at a net loss of $101.8 million in 1997, executives remained optimistic. In 1998, LP returned once more to profitability, achieving $12.8 million of net profit from $2.29 billion in sales. Reinforced by a strong housing market, a booming economy, operational improvements, and greater numbers of specialty products, Louisiana-Pacific's future looked bright.
Company restructuring in the early 2000s Louisiana-Pacific Corporation has undergone many changes since 2000. From 2000 to 2010 the company made a total of 20 divestitures. In May 2002 Louisiana-Pacific Corporation announced an asset sale and debt reduction program designed to enhance its long-term competitiveness and financial flexibility. Company-wide, the downsizing included the sale of a total of 935,000 acres of timberlands nationally, along with manufacturing plants making plywood, pulp, industrial panels, and lumber. Following the initial divestitures, the company focused on core businesses, including OSB, siding; engineered wood products, and plastic building products (vinyl siding, composite decking and moldings). In December 2002, Louisiana-Pacific Corporation (LP) finalized the sale of 33,000 acres of timberland near Oakdale, Louisiana, to Barrs & Glawson Investments, LLC for approximately $30 million. The timberland portion of the company's divestiture program exceeded the initial $700 million target by more than $50 million. In September 2003, LP announced the relocation of its headquarters from Portland, Oregon, to Nashville, Tennessee. Nashville was one of four cities considered for LP's headquarters. The other cities under consideration were Charlotte, North Carolina; Richmond, Virginia; and Portland, Oregon. The relocation was complete in July 2004. In line with the company's restructuring, in May 2004, Louisiana-Pacific announced a strategic plan to convert LP's Hayward, Wisc., commodity-oriented strand board (OSB) mill to make SmartSide siding products and replace this capacity with a new, state-of-the-art, low-cost OSB mill in Alabama. The conversion of the Hayward Mill was scheduled for 2005. The project agreement for the Alabama mill was signed in June 2005, with production start-up slated for late 2007. As of 2011, the mill still has not opened. But the company has said it still intends to reopen the 130-worker Clarke County mill, which can make more than 700 million square feet a year of OSB at full capacity. In 2004, the company began producing LP FlameBlock Fire-Rated OSB Sheathing, an ICC certified (ESR-1365), PS2-rated structural sheathing with a Class A Flame Spread Rating. According to the ICC Evaluation Service (ICC-ES), it provides extended burn-through resistance, delivering a 15-minute
thermal barrier (ASTM E119). It is durable on the job site, easy to work with, and is Exposure-1 rated to withstand weather during normal construction delays. In 2005, LP announced its intent to sell its vinyl siding business to KP Building Products, including LP's two vinyl siding mills, located in Holly Springs, Miss., and Acton, Ontario, and a warehouse in Milton, Ontario. In 2007, Fiber Composites, LLC, purchase the WeatherBest® composite decking and railing business from Louisiana-Pacific Corporation. The acquisition included LP's Meridian, Idaho, manufacturing facility and the WeatherBest® brand. In 2008, the company began producing LP SolidStart engineered wood products.
Key dates ==Engineered Wood Siding (SmartSide)==