Temple-Inland (TIN)

 

Wood fiber, in various forms, is the principal raw material we use in manufacturing our products. In 2008, we purchased approximately 45 percent of our virgin wood fiber requirements pursuant to long-term fiber supply agreements, the most significant of which were entered into in connection with our timberland sale in 2007. Purchases under these agreements are at market prices. The balance of our virgin wood fiber requirements was purchased at market prices from numerous landowners and other timber owners, as well as other producers of wood by-products.

 

Linerboard and corrugating medium are the principal materials used to make corrugated boxes. Our mills at Rome, Georgia and Bogalusa, Louisiana, only manufacture linerboard. Our Ontario, California; Maysville, Kentucky; and Orange, Texas, mills are traditionally linerboard mills, but can also manufacture corrugating medium. Our Newport, Indiana, mill manufactures gypsum facing paper, corrugating medium, and white-top linerboard. Our New Johnsonville, Tennessee, mill only manufactures corrugating medium. The principal raw material used by the Rome, Georgia; Orange, Texas; and Bogalusa, Louisiana, mills is virgin wood fiber, but

 

Wood fiber, in various forms, is the principal raw material we use in manufacturing our products. In October 2007, in conjunction with our transformation plan, we sold our 1.5 million acres of strategic timberland and entered into long-term fiber supply agreements with the purchaser. During 2007, owned timberland supplied approximately 41 percent of our virgin wood fiber requirements. The balance of our virgin wood fiber requirements was purchased from numerous landowners and other timber owners, as well as other producers of wood by-products. In 2008, we currently expect that we will purchase at market prices approximately 50 percent of our wood fiber requirements under our long-term fiber supply agreements, the most significant of which were entered into in connection with our timberland sale. The remainder of our virgin wood fiber requirements will be purchased at market prices from numerous landowners and other timber owners, as well as other producers of wood by-products.

 

Linerboard and corrugating medium are the principal materials used to make corrugated boxes. Our mills at Rome, Georgia and Bogalusa, Louisiana, only manufacture linerboard. Our Ontario, California; Maysville, Kentucky; and Orange, Texas, mills are traditionally linerboard mills, but can also manufacture corrugating medium. Our New Johnsonville, Tennessee, mill only manufactures corrugating medium. The principal raw material used by the Rome, Georgia; Orange, Texas; and Bogalusa, Louisiana, mills is virgin wood fiber, but each mill is also able to use recycled fiber for up to 15 percent of its wood fiber requirements. The Ontario, California, and Maysville, Kentucky, mills use only recycled fiber. The mill at New Johnsonville, Tennessee, uses a combination of virgin wood and recycled fiber.

 

In 2007, recycled fiber represented approximately 36 percent of the total wood fiber needs of our containerboard operations. We purchase recycled fiber at market prices on the open market from numerous suppliers. We generally produce more linerboard and less corrugating medium than is used by our converting facilities. The deficit of corrugating medium is filled through open market purchases and/or trades, and we sell any excess linerboard in the open market.

 

We obtain gypsum for our wallboard operations in Fletcher, Oklahoma, from one outside source through a long-term purchase contract at market prices. At our gypsum wallboard plants in West Memphis, Arkansas, and Cumberland City, Tennessee, synthetic gypsum is used as a raw material. Synthetic gypsum is a by-product of coal-burning electrical power plants. We have a long-term supply agreement for synthetic gypsum produced at a Tennessee Valley Authority electrical plant located adjacent to our Cumberland City plant. Synthetic gypsum acquired pursuant to this agreement supplies all the synthetic gypsum required by our Cumberland City and West Memphis plants. In 2007, our gypsum wallboard plant in McQueeney, Texas, primarily used gypsum obtained from its own quarry and gypsum acquired from the same source that supplies the Fletcher, Oklahoma, plant. In 2008, we expect the McQueeney plant will use synthetic gypsum and gypsum from our quarry.

 

We believe the sources outlined above will be sufficient to supply our raw material needs for the foreseeable future. We hedge very little of our raw material costs. The wood fiber market is difficult to predict and there can be no assurance of the future direction of prices for virgin wood or recycled fiber. Future increases in wood fiber prices could adversely affect our results of operations.

 

 

Wood fiber, in various forms, is the principal raw material we
use in manufacturing our products. In October 2007, in
conjunction with our transformation plan, we sold our
1.5 million acres of strategic timberland and entered into
long-term fiber supply agreements with the purchaser. During
2007, owned timberland supplied approximately 41 percent of
our virgin wood fiber requirements. The balance of our virgin
wood fiber requirements was purchased from numerous landowners
and other timber owners, as well as other producers of wood
by-products. In 2008, we currently expect that we will purchase
at market prices approximately 50 percent of our wood fiber
requirements under our long-term fiber supply agreements, the
most significant of which were entered into in connection with
our timberland sale. The remainder of our virgin wood fiber
requirements will be purchased at market prices from numerous
landowners and other timber owners, as well as other producers
of wood by-products.

 

Linerboard and corrugating medium are the principal materials
used to make corrugated boxes. Our mills at Rome, Georgia and
Bogalusa, Louisiana, only manufacture linerboard. Our Ontario,
California; Maysville, Kentucky; and Orange, Texas, mills are
traditionally linerboard mills, but can also manufacture
corrugating medium. Our New Johnsonville, Tennessee, mill only
manufactures corrugating medium. The principal raw material used
by the Rome, Georgia; Orange, Texas; and Bogalusa, Louisiana,
mills is virgin wood fiber, but each mill is also able to use
recycled fiber for up to 15 percent of its wood fiber
requirements. The Ontario, California, and Maysville, Kentucky,
mills use only recycled fiber. The mill at New Johnsonville,
Tennessee, uses a combination of virgin wood and recycled fiber.

 

In 2007, recycled fiber represented approximately
36 percent of the total wood fiber needs of our
containerboard operations. We purchase recycled fiber at market
prices on the open market from numerous suppliers. We generally
produce more linerboard and less corrugating medium than is used
by our converting facilities. The deficit of corrugating medium
is filled through open market purchases
and/or
trades, and we sell any excess linerboard in the open market.

 

We obtain gypsum for our wallboard operations in Fletcher,
Oklahoma, from one outside source through a long-term purchase
contract at market prices. At our gypsum wallboard plants in
West Memphis, Arkansas, and Cumberland City, Tennessee,
synthetic gypsum is used as a raw material. Synthetic gypsum is
a by-product of coal-burning electrical power plants. We have a
long-term supply agreement for synthetic gypsum produced at a
Tennessee Valley Authority electrical plant located adjacent to
our Cumberland City plant. Synthetic gypsum acquired pursuant to
this agreement supplies all the synthetic gypsum required by our
Cumberland City and West Memphis plants. In 2007, our gypsum
wallboard plant in McQueeney, Texas, primarily used gypsum
obtained from its own quarry and gypsum acquired from the same
source that supplies the Fletcher, Oklahoma, plant. In 2008, we
expect the McQueeney plant will use synthetic gypsum and gypsum
from our quarry.

 

We believe the sources outlined above will be sufficient to
supply our raw material needs for the foreseeable future. We
hedge very little of our raw material costs. The wood fiber
market is difficult to predict and there can be no assurance of
the future direction of prices for virgin wood or recycled
fiber. Future increases in wood fiber prices could adversely
affect our results of operations.

 

 

Our main raw material is virgin wood fiber. We own or lease about 1.8 million acres of strategic timberland located in Texas, Louisiana, Georgia, and Alabama. In 2006, wood fiber required for our corrugated packaging and forest products segments was supplied from these lands and as a by-product of our solid wood operations to the extent shown below:

 

 

The balance of our virgin wood fiber requirements was purchased from numerous landowners and other timber owners, as well as other producers of wood by-products.

 

Linerboard and corrugating medium are the principal materials used to make corrugated boxes. Our mills at Rome, Georgia and Bogalusa, Louisiana, only manufacture linerboard. Our Ontario, California; Maysville, Kentucky; and Orange, Texas, mills are traditionally linerboard mills, but can also manufacture corrugating

 

Our main raw material resource is wood fiber. We own or lease approximately two million acres of timberland located in Texas, Louisiana, Georgia, and Alabama. In 2005, wood fiber required for our corrugated packaging and forest products operations was supplied from these lands and as a by-product of our solid wood operations to the extent shown below:

 

The balance of our wood fiber requirements for these operations was purchased from numerous landowners and other timber owners, as well as other producers of wood by-products.

 

Linerboard and corrugating medium are the principal materials used to make corrugated boxes. Our mills at Rome, Georgia and Bogalusa, Louisiana, only manufacture linerboard. Our Ontario, California; Maysville, Kentucky; and Orange, Texas, mills are traditionally linerboard mills, but can also manufacture corrugating medium. Our New Johnsonville, Tennessee, mill only manufactures corrugating medium. The principal raw material used by the Rome, Georgia; Orange, Texas; and Bogalusa, Louisiana, mills is virgin fiber, but each mill is also able to use recycled fiber for up to 15 percent of its raw material requirements. The Ontario, California, and Maysville, Kentucky, mills use only recycled fiber. The mill at New Johnsonville, Tennessee, uses a combination of virgin and recycled fiber. In 2005, recycled fiber represented approximately 36 percent of the total fiber needs of our containerboard operations. The price of recycled fiber fluctuates due to normal supply and demand for the raw material and for the finished product. We purchase recycled fiber on the open market from numerous suppliers. Price fluctuations reflect the competitiveness of these markets. We generally produce more linerboard and less corrugating medium than is converted at our box plants. The deficit of corrugating medium is filled through open market purchases and/or trades, and we sell any excess linerboard in the open market.

 

We obtain gypsum for our wallboard operations in Fletcher, Oklahoma, from one outside source through a long-term purchase contract. At our gypsum wallboard plants in West Memphis, Arkansas, and Cumberland City, Tennessee, synthetic gypsum is used as a raw material. Synthetic gypsum is a by-product of coal-burning electrical power plants. We have a long-term supply agreement for synthetic gypsum produced at a Tennessee Valley Authority electrical plant located adjacent to the Cumberland City plant. Synthetic gypsum acquired pursuant to this agreement supplies all the synthetic gypsum required by the Cumberland City plant and our West Memphis plant.

 

Our main raw material resource is wood fiber. We own or lease approximately two million acres of timberland located in Texas, Louisiana, Georgia, and Alabama. In 2005, wood fiber required for our corrugated packaging and forest products operations was supplied from these lands and as a by-product of our solid wood operations to the extent shown below:

 

 

The balance of our wood fiber requirements for these operations was purchased from numerous landowners and other timber owners, as well as other producers of wood by-products.

 

Linerboard and corrugating medium are the principal materials used to make corrugated boxes. Our mills at Rome, Georgia and Bogalusa, Louisiana, only manufacture linerboard. Our Ontario, California; Maysville, Kentucky; and Orange, Texas, mills are traditionally linerboard mills, but can also manufacture corrugating medium. Our New Johnsonville, Tennessee, mill only manufactures corrugating medium. The principal raw material used by the Rome, Georgia; Orange, Texas; and Bogalusa, Louisiana, mills is virgin fiber, but each mill is also able to use recycled fiber for up to 15 percent of its raw material requirements. The Ontario, California, and Maysville, Kentucky, mills use only recycled fiber. The mill at New Johnsonville, Tennessee, uses a combination of virgin and recycled fiber. In 2005, recycled fiber represented approximately 36 percent of the total fiber needs of our containerboard operations. The price of recycled fiber fluctuates due to normal supply and demand for the raw material and for the finished product. We purchase recycled fiber on the open market from numerous suppliers. Price fluctuations reflect the competitiveness of these markets. We generally produce more linerboard and less corrugating medium than is converted at our box plants. The deficit of corrugating medium is filled through open market purchases and/or trades, and we sell any excess linerboard in the open market.

 

We obtain gypsum for our wallboard operations in Fletcher, Oklahoma, from one outside source through a long-term purchase contract. At our gypsum wallboard plants in West Memphis, Arkansas, and Cumberland City, Tennessee, synthetic gypsum is used as a raw material. Synthetic gypsum is a by-product of coal-burning electrical power plants. We have a long-term supply agreement for synthetic gypsum produced at a Tennessee Valley Authority electrical plant located adjacent to the Cumberland City plant. Synthetic gypsum acquired pursuant to this agreement supplies all the synthetic gypsum required by the Cumberland City plant and our