cutting schedules are 

 subject to the scrutiny of 

 computer manipulations in 

 optimizing returns from this 

 vast asset. 



While International's timber 

 assets are a vital part of 

 the integrated activities and 

 profitability of the overall 

 corporation, its 

 management has 

 historically searched for 

 ways to measure 

 performance of this 

 individual segment of its 

 business. A recent 

 development is the 

 company's decision to set 

 up its timberland assets 

 and organization in a limited 

 partnership as a subsidiary 

 of the parent company. 

 Stock in this timber 

 subsidiary is listed on the 

 New York Stock Exchange 

 separately from 

 International's common 

 stock, and its performance 

 may at a future date indicate 

 the profitability of a 

 stand-alone forestry 

 enterprise. 



Trends in the Ownership 

 of Commercial 

 Timberland-Until recent 

 years, the philosophy of 

 owning substantial amounts 

 of land to back up major 

 forest-product facilities was 

 accepted and 

 unchallenged. Forest 

 industry ownership of 

 commercial timberland in 



the South rose from 

 32,939,000 acres in 1952 to 

 38,415,000 acres in 1970 to 

 43,310,000 acres in 1985. 

 Current Forest Service 

 projections have this figure 

 up to 46,786,000 acres in 

 2010 and 48,912,000 by 

 2030. 



It remains to be seen 

 whether these projections 

 will require modification. 

 The tremendous capital 

 requirements for building a 

 new pulpmill or modifying 

 an old one now approach 

 $500 million to $1 billion. 

 This capital requirement 

 leads to a great deal of 

 soul searching by members 

 of the industry. With about 

 three-fourths of all the 

 timberland in the South 

 owned by individuals, the 

 industry recognizes that 

 greater dependence on 

 wood from private owners 

 would free capital now tied 

 up in maintaining a land 

 base. 



In the past 10 years, several 

 major companies have built 

 substantial manufacturing 

 facilities in the South with 

 little or no corporate 

 timberland base on the 

 premise that they can 

 compete successfully for 

 the "outside" stumpage. 

 This trend has caused 

 some rethinking within 

 companies who carry heavy 

 financial investments in 



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