Louisiana-Pacific
| File:Louisiana-Pacific logo.svg | |
| Company type | Public |
|---|---|
| NYSE: LPX S&P 400 Component | |
| Industry | Construction |
| Founded | 1973 in Portland, Oregon |
| Headquarters | , USA |
Number of locations | 24 (2012) |
Key people | Brad Southern (CEO) |
| Products | Building materials |
| Revenue | Increase US$2.828 billion (2018) |
| Increase US$526 million (2018) | |
| Increase US$420 million (2018) | |
| Total assets | Increase US$2.514 billion (2018) |
| Total equity | Increase US$1.700 billion (2018) |
Number of employees | 3,900 |
| Website | lpcorp |
Louisiana-Pacific Corporation (LP) stands as a prominent American manufacturer within the building materials sector, having been founded in 1973. As a trailblazer in producing oriented strand board (OSB) panels in the United States, LP has grown to become the globe's largest OSB manufacturer and a significant provider of engineered wood solutions. The company's headquarters are located in Nashville, Tennessee, where it supports builders and homeowners through an extensive network of distributors and retail home improvement centers.
By the year 2011, LP managed operations at 24 mills distributed as follows: fifteen across the United States, six in Canada, two in Chile, and one in Brazil.
History
Louisiana-Pacific was founded on January 5, 1973, as a result of a judicially mandated division of Georgia-Pacific. William H. Hunt was appointed as the inaugural chairman, with Harry A. Merlo succeeding him as CEO in 1974. Initially headquartered in Portland, Oregon, the company shifted its main office to Nashville in 2004.
The firm grew by acquiring lumber businesses throughout various U.S. states and expanded its product range by purchasing Fibreboard Corporation in 1976, enhancing its offerings for furniture and cabinetry materials. In 1979, LP further broadened its distribution capabilities by acquiring fifteen building-material centers from Lone Star Industries.
During the late 1970s, LP revolutionized OSB production by employing small-diameter, rapidly growing trees rather than traditional old-growth timber. This innovation led to the launch of OSB under the brand name Waferwood. Marketed as a durable and cost-efficient substitute for plywood sheathing and sub-flooring, it earned the nickname 'the smart man's plywood' following the inauguration of LP’s first Inner-Seal mill in 1980. Beyond OSB, LP also manufactures industrial wood products such as hardboard and medium density fiberboard, alongside cocoon cellulose insulation, plywood, and pulp.
The corporation manages over 950,000 acres of timberland and operates manufacturing facilities across 29 U.S. states as well as locations in Canada and Ireland.
LP has also pursued strategic marketing initiatives through sports sponsorships, including ownership of the Portland Timbers soccer team from 1979 to 1982 and holding naming rights for Nashville’s LP Field between 2006 and 2015.
Expansion during the 1980s
The resilience of LP’s OSB products against timber market volatility provided a foundation for growth. The company diversified its engineered wood product line by introducing I-beams designed for floor joists and rafters; these used approximately half the lumber volume compared to solid wood beams while offering superior strength and lighter weight. In addition, LP developed a concrete form version of Inner-Seal and launched Inner-Seal siding for residential exteriors in 1985. Fueled by these product innovations alongside a housing surge and increased remodeling activity, LP's revenue expanded by 50% between 1980 and 1988, with profits soaring by 400%. During this period, OSB sales rose from representing 6% of total revenue in 1980 to nearly 30% by 1990; conversely, lumber sales declined from 53% to around 30%.
In 1986, LP acquired Kirby Forest Industries along with Timber Realization Company’s California timberlands, adding close to 830,000 acres to its holdings to compensate for land lost due to Redwood National Park designation. The company received a final government compensation payment amounting to $440 million for this land in 1988. Subsequently, in 1990, LP expanded further by acquiring Weather Guard Inc., a producer specializing in recycled newsprint insulation products, as well as MiTek Wood Products based in North Carolina, which manufactures laminated veneer lumber and engineered wood I-beams.
The early 1990s
In 1990, Louisiana-Pacific encountered a downturn in sales and earnings across softwood lumber, plywood, and building materials, largely due to an economic slowdown and diminished construction activity amid federal budget constraints and geopolitical instability. Housing starts dropped to their lowest level since 1982. To address this, LP reduced output and increased exports of specialized building products.
The pulp sector also experienced a decline after several years of rising prices, with profit margins shrinking amid worldwide economic difficulties. LP managed three pulp mills: one supplying paper pulp to independent producers; another producing dissolving pulp for rayon and cellophane applications; and a third utilizing a pioneering chlorine-free process with zero water discharge, catering to printing and writing paper manufacturers.
During the early 1990s, LP achieved a robust recovery, posting record sales between 1992 and 1994. This expansion was fueled by acquisitions such as ABTco in the U.S. East and Forex in eastern Canada. According to the Spokane Journal of Business, LP succeeded by creating alternatives to conventional lumber and plywood. CEO Merlo highlighted that technological innovation, rather than reliance on old-growth timber, was the company’s fundamental advantage. Profits soared by 216% in 1992 compared to the previous year, with revenues reaching an unprecedented $3.04 billion by 1994. At that point, dimensional lumber accounted for only one-third of sales; over half stemmed from OSB products, while engineered wood products and pulp comprised roughly 20%.
Legal challenges imperil Louisiana-Pacific's future
Throughout the 1990s, Louisiana-Pacific confronted substantial legal obstacles primarily connected to its Inner-Seal exterior siding product. The company was named defendant in a major class-action lawsuit concerning its OSB siding manufactured until 1996. Homeowners claimed premature deterioration, discoloration, and fungal infestation despite a 25-year warranty. Initial complaints centered on OSB panels used on Florida roofs damaged by Hurricane Andrew, which deteriorated upon exposure to rain. LP resolved these disputes within two years and redesigned the product as LPSmartSide, which has since sold nearly 3 billion square feet without any fungal decay claims.
Multiple class-action lawsuits and a Minnesota attorney general suit targeted Inner-Seal siding. Although LP denied liability, it settled promptly, disbursing over $22 million by 1991 and an additional $14 million between 1993 and 1994. In 1996, LP allocated at least $275 million to resolve claims from approximately 800,000 homeowners. By 2003, through its Claimant Offer Program—the largest class-action settlement in the siding industry—LP had paid close to $1 billion on more than 37,000 claims.
LP also faced shareholder lawsuits; in 1996 it settled a securities class-action for $65 million related to nondisclosure of defective OSB boards—Oregon’s largest securities settlement at that time. That same year, LP settled a sexual harassment case involving then-CEO Merlo. Furthermore, Colorado filed fraud and environmental charges against LP in 1995 concerning its Montrose facility. Amid these controversies and diminishing board confidence in Merlo’s leadership, he resigned and was succeeded by Mark Suwyn from International Paper.
This era represented a pivotal moment for LP’s corporate strategy and leadership structure, influencing its market standing and triggering significant reforms in product development and governance.
Revitalization Efforts in the Late 1990s
Facing a new leadership era, LP encountered considerable obstacles. In 1995, the company reported a net loss of $51.7 million, impacted by an oversupply of Canadian lumber in the US market, elevated interest rates, adverse weather hindering home construction, and intensifying competition from other OSB manufacturers. As OSB increasingly supplanted plywood as a preferred building material, LP’s Inner-Seal transitioned from being a niche product to a standard commodity.
Under CEO Suwyn’s direction, a comprehensive recovery plan was implemented. The company discontinued unprofitable segments, closing 22 facilities by 1996 and divesting divisions such as Weather-Seal doors and windows in 1998. Timberland holdings were sold to Simpson Investment Company and Mendocino Redwood Company, generating over $875 million through asset sales that improved financial flexibility and sharpened focus on core building materials.
LP also broadened its specialty product portfolio via strategic acquisitions including Associated Chemists (specialty coatings), GreenStone Industries (cellulose insulation), Tecton Laminates (laminated veneer lumber), ABT Building Products (specialty items complementing commodity lines), and Evans Forest Products Ltd. (engineered wood).
In 1997, LP inaugurated its Advanced Technology Center to develop innovative products like Smart Start siding, TechShield panels, TopNotch flooring, and Cocoon insulation. Operational enhancements featured the Rapid Change Technologies employee training initiative and Business Process Improvement techniques aimed at increasing OSB mill productivity. Furthermore, LP fortified partnerships with major home improvement retailers such as Home Depot and Lowe’s, pivotal players in the fastest expanding sector of the construction industry.
Despite a 13% sales decline in 1996 accompanied by a $200.7 million loss and a $101.8 million loss in 1997, LP rebounded to profitability in 1998 with a net income of $12.8 million on revenues of $2.29 billion. This turnaround was driven by a buoyant housing market, operational efficiencies, and an enhanced specialty product range positioning Louisiana-Pacific for renewed expansion.
Organizational Restructuring in the Early 2000s
Between 2000 and 2010, Louisiana-Pacific Corporation undertook 20 divestitures designed to strengthen competitiveness and improve financial agility. In May 2002, the company initiated an asset disposition and debt reduction program that involved selling 935,000 acres of timberlands along with several manufacturing plants producing plywood, pulp, industrial panels, and lumber. This strategic realignment concentrated LP’s efforts on core offerings: OSB, siding products, engineered wood solutions, and plastic building materials such as vinyl siding and composite decking.
In December 2002, LP sold approximately 33,000 acres of Louisiana timberland for around $30 million. Throughout 2003, further timberland and mill assets were divested across Louisiana, Texas, and Idaho—surpassing the targeted $700 million divestiture goal by more than $50 million.
In September 2003, LP relocated its corporate headquarters from Portland, Oregon to Nashville, Tennessee—a transition completed by July 2004—to better align with its restructuring objectives.
In May 2004, LP announced plans to convert its Hayward, Wisconsin OSB facility into SmartSide siding production while constructing a new low-cost OSB mill in Alabama. Although production at the Alabama site was scheduled for late 2007, it remained unopened as of 2011; nevertheless, LP continued intending to reopen the Clarke County mill with an annual capacity exceeding 700 million square feet.
Also in 2004, LP launched LP FlameBlock Fire-Rated OSB Sheathing—an ICC-certified structural sheathing product providing superior fire resistance and durability for building applications.
By 2005, LP declared the sale of its vinyl siding operations to KP Building Products, which included two vinyl siding manufacturing plants located in Mississippi and Ontario. In 2007, Fiber Composites acquired LP’s WeatherBest® composite decking and railing business along with the Meridian, Idaho production facility.
In 2008, LP expanded its engineered wood offerings by introducing LP SolidStart.
Key dates
| Key dates | |
|---|---|
| 1972 | Louisiana-Pacific is separated from Georgia-Pacific as an independent entity. |
| 1974 | Harry Merlo assumes the role of Louisiana-Pacific's inaugural chairman. |
| 1978 | Acquisition of Fibreboard Corporation; the U.S. government establishes Redwood National Park on a portion of LP's timber holdings. |
| 1985 | Launches Oriented Strand Board (OSB) for use as exterior siding. |
| 1990 | Legal actions are initiated concerning faulty OSB siding products. |
| 1996 | Mark Suwyn takes over as chairman and CEO, succeeding Merlo. |
| 1998 | Purchases ABT Building Products, strengthening its position in the building materials sector. |
| 2002 | Announces a significant restructuring plan, divesting timberlands, plywood, pulp, industrial panels, and lumber to concentrate on OSB, siding, engineered wood, and plastic building materials. |
| 2004 | Moves corporate headquarters from Portland, Oregon to Nashville, Tennessee. |
| 2005 | Declares intention to divest vinyl siding operations to KP Building Products. |
| 2007 | Disposes of WeatherBest® decking business to Fiber Composites, LLC. |
Engineered Wood Siding (SmartSide)
Louisiana-Pacific manufactures engineered wood siding at dedicated facilities, offering a range of siding products that complement its primary focus on building materials.
Additional
LP adheres to Sustainable Forestry Initiative (SFI) standards in forest management and timber sourcing, ensuring environmentally responsible procurement recognized by North American green building programs.
The company actively contributes to community development through financial support, product donations, and volunteer initiatives targeting shelter provision, education enhancement, social services, and environmental stewardship.
Implementation of Lean Six Sigma practices at LP Building Products drives operational improvements. Between 2006 and 2009, the company expanded training for Black Belts and Green Belts across operations, realizing cost savings with a return on investment exceeding six times.
- Domestic subsidiaries
GreenStone Industries, Inc.; Ketchikan Pulp Company; Louisiana-Pacific International, Inc.; L-PSPV, Inc.; LP Pinewood SPV, LLC; LPS Corporation; L-P SPV2, LLC
- Foreign subsidiaries
Louisiana-Pacific Canada Pulp Co.; Louisiana-Pacific Canada Sales ULC; Louisiana-Pacific Canada Holding Ltd.; Louisiana-Pacific Canada Ltd.; Louisiana-Pacific (OSB) Ltd.; Louisiana-Pacific South America S.A.; Louisiana-Pacific Chile S.A.; Louisiana-Pacific del Perú S.A.C.; LP-Brasil OSB Industria E Comercio S.A.
- Joint ventures (less than 51% owned)
Abitibi-LP Engineered Wood Inc.; Abitibi-LP Engineered Wood II Inc.; Canfor-LP OSB (G.P.) Corp; Canfor-LP OSB Limited Partnership; US GreenFiber, LLC
- Principal competitors
Georgia-Pacific Group; Boise-Cascade Corporation; James Hardie; Weyerhaeuser Company; Tolko
On September 4, 2013, LP revealed plans to acquire Vancouver-based Ainsworth Lumber through a $1.1 billion transaction involving stock and cash, aiming to expand its engineered wood products market presence.
External links
- Louisiana Pacific corporate website
- Funding Universe.com – Company history through 1999
- Pages with broken file links
- Manufacturing companies based in Nashville, Tennessee
- Manufacturing companies established in 1973
- American companies established in 1973
- 1973 establishments in Oregon
- Portland Timbers
- Superfund sites in California
- Companies listed on the New York Stock Exchange
- Corporate spin-offs
- Building materials companies of the United States
- Companies in the S&P 400
- 5
- Companies of the United States by year of establishment