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Transnational Corporations

Profile of Westvaco

June 1999

compiled by George Draffan
Public Information Network
PO Box 95316, Seattle WA 98145-2316

footnoted version available by e-mail request

Corporate headquarters

Westvaco Building
299 Park Avenue
New York, NY 10171
telephone 212-688-5000
http://www.westvaco.com

 

History

The West Virginia Pulp and Paper Company was founded by Scottish immigrants in 1888 with a mill in Piedmont, West Virginia; the corporation changed its name to Westvaco in 1969.

 

Land ownership

Westvaco owns 1.35 million acres of forest land in the eastern United States, and manages an additional 1.4 million acres of land owned by 2,800 private landowners.

Westvaco owns 115,000 acres in Brazil located more than 1,000 miles south of the Amazon rainforest.

 

Operations

Westvaco is a major producer of paper, envelopes, packaging and specialty chemicals with annual sales of $2.9 billion. International business accounts for 25 percent of sales and involves customers in more than 70 nations, including wholly-owned manufacturing operations in Brazil and the Czech Republic, and a joint venture in Guangzhou, China. Westvaco owns 1.5 million acres of timberland in the United States and Brazil.

Westvaco ranked 12th in U.S. paper and paperboard production capacity in 1997, with 2,675,000 tons. Major paper mills are located in Luke, MD, Covington, VA, Charleston, SC, and Wickliffe, KY.

Westvaco produces packaging for beverages, express packaging, food, healthcare and personal care items, tobacco and other consumer and industrial products.

 

Brazil

In 1996, Westvaco subsidiary Rigesa Ltda acquired the consumer products printing and packaging plant in Valinhos, Brazil from Impressora Paranaense, S.A., a large printing company. Rigesa, which is headquartered in Valinhos, manufactures unbleached packaging materials at two paper mills in Brazil and operates four corrugated container plants in the country. Rigesa will provide administrative, logistical and other support services for the acquired plant while Westvaco's U.S.-based Consumer Packaging Division will be responsible for the plant's operations and product sales. Westvaco's Consumer Packaging Division, which operates seven plants in the United States and one in the Czech Republic, prints and converts bleached board into premium-quality packaging for beverages, confectionary, cosmetics, food, personal care items, pharmaceuticals, and tobacco. "The plant in Brazil fits well with our global marketing strategy and gives Westvaco an excellent position in the emerging markets of the southern hemisphere," said John A. Luke, Jr., Chairman and Chief Executive Officer of Westvaco.

In 1998, Westvaco announced a $9 million expansion of Westvaco do Brasil, a consumer packaging operation in Valinhos, Brazil. The project, which is scheduled to begin this month and be completed in late 1998, will add a state-of-the-art flexographic printing press to complement modern, gravure printing capabilities. The expansion follows more than $1 million invested in the plant since it was purchased in 1996 from Impressora Paranaense, S. "This expansion is consistent with our long-term view of business prospects in Brazil and other Mercosul nations," said E. W. Denton, Managing Director of Westvaco do Brasil. "The Brazilian government's swift and prudent actions in response to current market turmoil reinforces our confidence." (Mercosul is a regional trading bloc that includes Argentina, Brazil, Chile, Paraguay and Uruguay.)

Rigesa is one of the largest suppliers of differentiated corrugated packaging in Brazil. The company produces kraft paperboard, linerboard and corrugating medium at mills in Tres Barras, SC, and Valinhos, SP. Rigesa operates corrugated box plants in Valinhos, Manaus, AM; Blumenau, SC; and Pacajus, CE.

 

China

In 1998, Westvaco acquired a substantial equity interest in a new consumer packaging plant in Guangzhou, southeast China. The plant is owned by a Chinese subsidiary of Shorewood Packaging Corporation. Westvaco will acquire 45 percent of Shorewood's Chinese operations for approximately $25 million. The arrangement with Shorewood will quickly increase Westvaco's participation in Chinese markets. Westvaco entered the Chinese market nearly 20 years ago and exports paper, paperboard and specialty chemicals to a variety of customers in the country. The plant's customer base includes multinational and Chinese producers of confections, cosmetics, personal care items, film, batteries and tobacco. Shorewood will have day-to-day management responsibility for the new plant and will work closely with Westvaco on marketing programs and new product development. Shorewood Packaging prints and manufactures high quality paperboard packaging for the cosmetics, food, home video, music, software, tobacco and toiletries and general consumer markets in the United States and Canada. Based in New York City, the company has key operations in Waterbury, CT; Williamsburg, Danville and Roanoke, VA; LaGrange, GA; Andalusia, AL; Springfield, OR; and Brockville, Smith Falls, and Toronto, Canada.

 

Czech Republic

In 1995, Westvaco built a new plant in the Czech Republic.

 

Directors and Interlocks

John A. Luke, Jr., Chairman and Chief Executive Officer.

Samuel W. Bodman III, Cabot Corporation.

W.L. Lyons Brown, Jr., Former CEO of Brown-Forman.

Michael E. Campbell, Executive Vice President of Olin Corporation

Dr. Thomas W. Cole, Jr., President of Clark Atlanta University

David L. Hopkins, Jr. Chairman of Alex. Brown Capital Advisory & Trust.

Rudolph G. Johnstone, Jr., Executive Vice President of Westvaco Corporation

Douglas S. Luke.

William R. Miller, Retired Vice Chairman of the Board Bristol-Myers Squibb.

Jane L. Warner, President of Kautex Textron North America and Executive Vice President Textron Automotive.

Richard A. Zimmerman, Retired CEO of Hershey Foods.

 

Westvaco promoting international trade

In 1996, Westvaco CEO John A. Luke, Jr. met U.S. President Clinton and U.S. and European Union (EU) trade officials to promote international trade opportunities for U.S. business. Luke emphasized the need for additional tariff reductions to promote U.S. exports as well as the removal of discriminatory nontariff barriers to trade. Meeting participants included Jacques Santor, President of the European Commission; Michael Kantor, U.S. Secretary of Commerce; and Charlene Barshefsky, Acting U.S. Trade Representative. Mr. Luke represented all American businesses participating in the TransAtlantic Business Dialogue (TABD) meeting in November 1997 in Seville, Spain. European businesses were represented by Juergen Schrempp, Chairman and Chief Executive Officer of German auto manufacturer Daimler-Benz. Luke is Chairman of the International Business Committee of the paper industry's trade organization, the American Forest & Paper Association. At the Seville TABD meeting, he co-chaired the Trade Liberalization Working Group, one of four groups to be co-chaired by one U.S. and one EU chief executive officer.

In 1998, Westvaco Senior Vice President and General Counsel Wendell L. Willkie, II testified before the U.S. House Ways and Means trade subcommittee hearing on Japan on behalf of Westvaco and the American Forest and Paper Association (AF&PA). Willkie testified that liberalizing Japan's markets is essential to resolving the Asian economic crisis, which is significantly impacting the U.S. paper and forest products industry. He said that a current trade liberalization initiative within APEC (the Asia-Pacific Economic Cooperation forum) offered new opportunities for U.S. exporters to gain a greater share of Japanese and other Asian markets. The APEC initiative, which involves the United States and 17 Asian-Pacific nations, would result in the speedy removal of tariff and non-tariff barriers among participating countries. The initiative identifies nine sectors for priority treatment: forest products; fish and fish products; toys; gems and jewelry; chemicals; medical equipment; environmental goods and services; energy and telecommunications, sectors generating $1.5 trillion in sales for the APEC countries. Mr. Willkie noted that industry statistics for the first quarter of 1998 demonstrate the impact of the Asian economic crisis on the U.S. paper and forest products industry and the urgent need for eliminating trade barriers in Asian countries. Mr. Willkie said that compared to the first quarter of 1997, U.S. exports of wood and paper products to the Far East have declined by 25 to 44 percent while U.S. imports of those products from the region have increased from 18 to 700 percent. The U.S. forest products industry is the largest producer of wood and paper products in the world and accounts for 8 percent of U.S. manufacturing output. The industry employs 1.6 million Americans and ranks among the top 10 manufacturing employers in 46 states, with U.S. and foreign sales of more than $200 billion annually.

 

Endangered Species

In 1998, Westvaco signed a South Carolina statewide Safe Harbor Agreement with the U.S. Dept. of the Interior and the South Carolina Department of Natural Resources. In exchange for voluntarily creating, restoring or enhancing habitat for the endangered Red-cockaded Woodpecker, Westvaco will not have to fear increased legal liability if, as a result of their efforts, Red-cockaded Woodpeckers appear or multiply on their land. The Safe Harbor Agreement was developed jointly by SCDNR, the South Carolina Forestry Commission, the South Carolina Red-cockaded Woodpecker Conservation Coalition, Westvaco Corporation, the U.S. Fish and Wildlife Service and Environmental Defense Fund. Westvaco will enroll a 10,600-acre tract near the Francis Marion National Forest in Berkeley County. Also enrolling in the program is Mepkin Abbey, a 3,100-acre property that is home to a group of Trappist monks, a member of Westvaco's Cooperative Forest Management landowner assistance program. Initially, 15 landowners, representing 84,000 acres, will be participating. The endangered Red-cockaded Woodpecker inhabits mature, fire-maintained pine forests of the southern coastal plain from southern Virginia, south to Florida and east to Texas. In 1970, this woodpecker was listed as endangered due to loss of habitat and improved fire suppression.

 

Pollution

Westvaco has pioneered changes in the way chlorine bleaching is done; "its approach does not substantially reduce chlorine use, but reduces the formation of dioxins by injecting chlorine in multiple charges under higher pH conditions." Westvaco's injection process has also been described as a way to retain a paper bleaching market for chlorine.

 

Public relations

The retaliation of Westvaco's public relations machine (aided by the U.S. Forest Service, the West Virginia Dept. of Agriculture, and the Dept. of Forestry faculty from the West Virginia University) for an article on forest health in the Beckley Register-Herald, Oct. 6, 1991 is described in Charles E. Little's book The Dying of the Trees.

 

Biotechnology Joint Venture

In 1999, Fletcher Challenge Forests, International Paper, Monsanto Company and Westvaco Corporation announced a $60 million biotechnology joint venture to produce and market tree seedlings for the forestry market worldwide. Genesis Research and Development Corporation Limited, an Auckland, New Zealand, biotechnology research company, will provide genomics research. The joint venture plans "to actively seek technological advances from independent laboratories, universities and other companies in order to position itself to market new advances in forestry biotechnology to the world's tree growers in the shortest possible time." The joint venture will focus on tree species that represent a majority of the seedlings now planted by the forest industry around the world and will initially direct its efforts toward various eucalyptus and poplar species, Radiata pine, loblolly pine and sweetgum. Targeted genetic improvements include: herbicide tolerant planting stock to enable more cost effective, as-needed control of competing vegetation; higher growth rates to allow more wood to be grown on less land at lower cost; improved fiber quality and uniformity to increase efficiency in paper and wood products manufacturing processes. Fletcher Challenge Forests is a New Zealand based company focusing on developing solid wood products for the Australasian, North American and Asian markets. The Fletcher Challenge Group employs some 15,000 people worldwide in building, paper, energy and forestry businesses. International Paper is a worldwide producer of printing paper, packaging and forest products, with operations in 31 countries, employing more than 80,000 people, and exporting its products to more than 130 nations. Monsanto's 30,000 employees worldwide make and market high-value agricultural products, pharmaceuticals and food ingredients.