Boise Cascade Corp. -  Paper -  Category Main Page 

(208) 384-6161
1111 West Jefferson Street

P.O. Box 50

Boise, Idaho 83728
www.bc.com
 

Sales

$8.2 billion

Business Description

Boise is a multinational contract and retail distributor of office supplies and paper, technology products, and office furniture. Boise is also a major distributor of building materials and an integrated manufacturer and distributor of paper, packaging, and wood products. We are headquartered in Boise, Idaho, with domestic and international operations. We own or control approximately 2.4 million acres of timberland in the United States. We were incorporated under the laws of Delaware in 1931 under the name Boise Payette Lumber Company of Delaware, as a successor to an Idaho corporation formed in 1913. In 1957, our name was changed to Boise Cascade Corporation.

We have historically reported our business results using four reportable segments: Boise Office Solutions; Boise Building Solutions; Boise Paper Solutions; and Corporate and Other (support staff services). In December 2003, we acquired OfficeMax, Inc. (OfficeMax). After the acquisition, we began reporting Boise Office Solutions as two separate segments, Boise Office Solutions, Contract, and Boise Office Solutions, Retail. All of our segments, except Boise Office Solutions, Retail, have a December 31 year-end. Our Boise Office Solutions, Retail, segment maintains a fiscal year that ends on the last Saturday in December, which in 2003 was December 27. We consolidate the fiscal-year results of Boise Office Solutions, Retail, with the calendar-year results of our other segments. 

Our acquisition of OfficeMax significantly changed our business mix and was in keeping with our long-term strategy of growing our distribution businesses. The acquisition more than doubled the size of Boise Office Solutions, and this part of our business now generates approximately two-thirds of total company sales.

Boise Office Solutions, Contract

Boise distributes a broad line of items for the office, including office supplies and paper, technology products, and office furniture, through our Boise Office Solutions, Contract, segment. This segment markets and sells through field salespeople, catalogs, the Internet, and stores in Canada, Hawaii, Australia, and New Zealand. It also includes sales generated by OfficeMax's field salespeople, catalogs, and E-commerce business after December 9, 2003. Substantially all products sold by this segment are purchased from outside manufacturers or from industry wholesalers, except office papers, which are sourced primarily from our paper operations. Boise Office Solutions, Contract, sells these office products directly to large corporate, government, and small and medium sized offices in the United States, Canada, Australia, New Zealand, and Mexico.

Customers with more than one location are often served under the terms of one national contract that provides consistent products, prices, and service to multiple locations. If the customer desires, we also provide summary billings, usage reporting, and other special services. On January 31, 2004, Boise Office Solutions, Contract, operated 80 distribution centers, 6 customer service centers, 5 wholesale/manufacturing facilities, and 2 outbound sales centers. Boise Office Solutions, Contract, also operated 106 stores in Canada, Hawaii, Australia, and New Zealand.

Boise Office Solutions, Contract, sales for 2003, 2002, 2001, 2000, and 1999 were $3,742 million, $3,546 million, $3,536 million, $3,697 million, and $3,397 million, respectively.

Boise Office Solutions, Retail

Boise Office Solutions, Retail, which operates under the trade name OfficeMax, is a retail distributor of office supplies and paper, technology products, and office furniture. Its superstores feature CopyMax® and FurnitureMax® in-store modules devoted to print-for-pay services and office furniture. Our retail segment has operations in the United States, Puerto Rico, and the U.S. Virgin Islands and a 51%-owned joint venture in Mexico. In 2003, all products sold by this segment were purchased from outside manufacturers or from industry wholesalers. The retail office products segment did not purchase any office paper from Boise during 2003, but it will in the future. The combined Boise Office Solutions, which comprises our contract and retail segments, expects to sell approximately 650,000 tons of Boise office paper in 2004, compared with 568,000 tons in 2003.

This segment includes the operating results of our office supply superstores. On January 31, 2004, our retail office products segment operated 970 superstores, 3 large distribution centers that support the superstores, 3 small-format stores, and 1 small distribution center. Boise Office Solutions, Retail, sales from December 10 to December 27, 2003, were $283 million.

Boise Building Solutions

Boise is a major producer of structural panels (plywood and oriented strand board), lumber, and particleboard through our Boise Building Solutions segment. We also manufacture engineered wood products, including laminated veneer lumber (LVL), which is a high-strength engineered structural lumber product; wood I-joists; and laminated beams. Most of our production is sold to independent wholesalers and dealers and through our own wholesale building materials distribution outlets. Our wood products are used primarily in housing, industrial construction, and a variety of manufactured products. Building materials manufacturing sales for 2003, 2002, 2001, 2000, and 1999 were $824 million, $774 million, $792 million, $882 million, and $958 million, respectively, while building materials distribution sales for the same years were $2,048 million, $1,696 million, $1,596 million, $1,601 million, and $1,289 million.

Boise Paper Solutions

Boise manufactures and sells uncoated free sheet papers (office papers, printing grades, forms bond, envelope papers, and value-added papers), containerboard, corrugated containers, newsprint, and market pulp through our Boise Paper Solutions segment. Boise Paper Solutions sales for 2003, 2002, 2001, 2000, and 1999 were $1,853 million, $1,878 million, $1,942 million, $2,048 million, and $1,887 million, respectively.

This business segment is focused primarily on uncoated free sheet papers and containerboard and corrugated containers. Uncoated free sheet represented 56% of segment revenues in 2003, containerboard and corrugated containers accounted for 20%, and newsprint accounted for 9%. Market pulp and wood fiber accounted for the remaining 15% of revenues.

About 41% of our uncoated free sheet paper, including about 77% of our office papers, was sold through Boise Office Solutions. We expect this percentage to increase with the addition of our retail office products segment. The equivalent of 54% of our containerboard production is consumed by our corrugated container plants.

Our paper, containerboard, and newsprint are manufactured at five mills in the United States. These mills had an annual capacity of 2.9 million short tons (2,000 pounds) on December 31, 2003. With the exception of newsprint, our products are sold to distributors, including Boise Office Solutions, and industrial customers, primarily by our own sales personnel. Newsprint is marketed by Abitibi-Consolidated Company of Canada. Our corrugated containers are manufactured at five U.S. plants, which have an annual capacity of approximately 6.5 billion square feet. The containers produced at our plants are used to package fresh fruit and vegetables, processed food, beverages, and many other industrial and consumer products. We sell our corrugated containers primarily through our own sales personnel.

Our paper mills are supplied with pulp primarily from our own integrated pulp mills. Pulp mills in the Northwest manufacture chemical pulp from wood residuals produced as a byproduct of solid wood products manufacturing facilities. They also obtain fiber from our cottonwood fiber farm near Wallula, Washington. Pulp mills in the Midwest and South manufacture chemical, thermomechanical, and groundwood pulp, primarily from pulpwood logs and, to a lesser extent, from wood residuals from solid wood products manufacturing facilities. We also process most of the recycled fiber used in our paper and containerboard products.

Wood residuals are provided by our own sawmills and panel plants in the Northwest and, to a lesser extent, in the South or are purchased from outside sources.
 

Ticker

BC