Plum Creek Timber Company (PCL)

With the advances in technology concerning email, data storage, and networks (among other things), we are becoming an increasingly paperless society. This trend is evidenced by the declining demand for nearly all grades of paper in the US. This lack of demand causes pulpwood prices to decrease, which also hurts PCL. This trend will continue as technology improves even more, which will continue to dampen PCL's revenues.

Rising interest rates could slow the residential real estate market, hurting Plum Creek's real estate business; they could also slow housing development and renovation, the largest market for wood, greatly reducing Plum Creek's timber revenues.

The influx of Canadian timber into the global timber market could create a supply glut, putting downward pressure on timber prices and lowering Plum Creek's profit margins.

Mountain pine beetles are destroying timber lands in Colorado and other areas. See the recent article in the New York Times:

http://www.nytimes.com/2008/11/18/science/18trees.html

If timber lands are destroyed, the timber supply will be impacted (which could be offset by higher pricing). However, in the interim, weaker demand coupled with increased harvesting of timber assets prior to destruction of beetles could be negative for prices.