Superior Pine Embraces a Growth, Diversification Strategy
By Les Shaver
Scott Griffin, president and CEO of Superior Pine Products Company
The essential building blocks for success in the forestry business are in place for Fargo, Georgia- based Superior Pine Products.
“We’ve got a really good forest here,” says Scott Griffin, president and CEO of Superior Pine Products Company. “It’s high quality. It’s a young forest now, since we have done some heavy harvesting over the past 10 years, but there’s a lot of good volume coming down the pike.”
But it takes more than an excellent forest to achieve success in the business today. With climate and wildfire challenges and stumpage prices posing persistent problems, forestry companies can’t rest on their laurels. Fortunately, Superior Pine has a history of adjusting when the times demand it.
And now, the business climate is presenting new opportunities for this almost century-old company into its fourth generation of family ownership. Instead of managing a centralized piece of property in Fargo, Superior Pine is transforming into a land management company with holdings around the Southeast.
The white-hot real estate is providing the jet fuel for this transformation, allowing Superior Pine to sell out of its long-held land positions around Fargo and buy into potentially better timber markets in other states.
“We’re actively trying to look at buying more land in other areas and selling some here in South Georgia,” Griffin says.
A Rich History
The origins of Superior Pine trace back to the late 1800s. After its founding, the company, known then as Paper Makers Chemicals, became one of the largest suppliers of chemicals in the paper- making industry. In the 1920s, the three founding principal partners—the Knight family, the Lawrence family and the Williams family—acquired the Suwannee Forest in Fargo as a raw material source and have relied upon it ever since.
While Griffin is at the helm, the founding families are represented on the company’s board of directors and are very engaged in strategy.
“It’s a family-owned business that is into the fourth generation, and that is not typical of family-owned businesses,” says Andy Stone, former president and CEO of Superior Pine and director of family business development at Forest Resource Consultants. “Typically, they don’t survive that long. It has survived a lot of different changes in the forestry industry.”
Stone says most family-owned businesses don’t last past the third generation. He attributes his former employer’s resilience to each generation keeping the next generation informed and involved by bringing them to Fargo and introducing them to the business.
Those descendants of the founding families brought in Griffin, a 30-year veteran of the timberland investment management industry and Army National Guard, in March 2019. Before Superior Pine, Griffin worked for Resource Management Service (RMS), Forest Systems and Campbell Global.
“It’s a really good company,” Griffin says, explaining what attracted him to Superior Pine. “They’re very for- ward-thinking.”
Throughout its history, sustainability and industry leadership have been a priority to Superior Pine. Former CEO William Oettmeier, Sr. was instrumental in launching the American Tree Farm certification program and helping the Forest Landowners Association get started many years ago. “There is a long, rich history of protecting the environment here,” Griffin says.
Superior Pine aggressively practices silviculture by looking at every track and writing a prescription for its care. It pulls beds up and plants improved pine seedlings on top of those beds, and it engages in herbaceous weed control and fertilization to allow its trees to thrive.
“It’s not a cookie-cutter program,” Griffin says. “Some stands need more love than others, but we want to make sure that all of the trees that we’re plant- ing or managing are on a good growth trajectory.” Chad Nimmer, owner of Pierce Timber/Suwannee Forest Products, has worked with the company for almost two decades. He says Superior Pine proactively manages its land with people out in the field observing what their loggers do.
“They are one of the more aggressive companies in how they grow their timber and the intensive management with their harvest rotations,” he says.
Over the years, Superior Pine also has diversified, moving into blueberry farming to generate revenue in the spring, when wood prices drop.
“The blueberries help to provide that extra cash flow for the company, during a time when timber prices some- times decrease” Griffin says. “We have high-quality fruit that we grow, and we try to sell to high-quality brokerages, companies and grocery stores.”
Under Griffin, the company continues to look for new ways to generate revenue. For example, he sees opportunities to sell carbon credits generated from Superior Pine’s land management activities.
“That whole [carbon] program is growing in the south,” Griffin says. “Historically, it had been a California process, but it’s growing to a national level now. We’ve actually explored some options, and so we see that as an opportunity for the company to make some extra income into the future with minimal impact to our sustainable operations.”
Blueberries and forestry management aren’t the only ways that Superior Pine generates revenue. The organization also owns a realty company. “If we buy something under the realty division, we try to clean it up, get it producing, and then sell it,” Griffin says.
“Typically, our goal is to try to improve the land and then either keep it or sell it depending on size and location.”
Lately, Superior Pine has stepped up its acquisitions and dispositions, selling non-strategic tracts near its home base of Fargo. It started the process in 2011, trading out of about 38,000 acres of its original property and making two purchases totaling approximately 30,000 acres in Alabama, according to Stone.
Much like adding the blueberry farm or exploring carbon offsets, the goal is diversification.
“The family wants to diversify,” Griffin says. “They’ve got most of their investment in one contiguous 200,000-acre block in two counties between two oceans in South Georgia. So, with the threat of hurricanes and wildfires, they decided that they would sell some here and then redeploy that money in other areas.”
Fargo sits in an especially vulnerable place next to the Okefenokee Swamp. When the area burns, Griffin says Superior Pine needs to be ready to fight the fire at its property line.
But lately, hurricanes and storms have been a bigger worry. “When you’re dealing with Mother Nature on a daily basis, it affects your operations and your budgets,” Griffin says. “In the last year, we’ve had over 100 inches of rain, and the annual average is about 50 inches. We’ve been getting hammered.”
Superior Pine isn’t alone. Brooks Mendell, Ph.D., president and CEO of Forisk and a board member at Superior Pine, says severe weather events, like wildfires, are forcing companies to think hard about geographic diversification. “Fifty years ago, even 30 years ago, people were looking for large contiguous blocks of forest land because it’s more efficient,” Mendell says. “But now one of the top two or three issues is to mitigate risk with natural events. This is a theme that’s coming up across companies.”
While Superior Pine might want to sell some forest land, others are eager to pur- chase it. With many people leaving cities for areas like rural Georgia during the pandemic, there has been a lot of inter- est in Superior Pine’s smaller tracts for homes. “We’re getting premium prices and we’ll continue that as long as the prices remain strong,” Griffin says. Superior Pine is redeploying that money to forests further inland in Georgia, Alabama and South Carolina, where it currently owns the land.
“We think those markets are pretty decent,” Griffin says. “We don’t think we will be impacted as much in those areas with the weather and wildfire risks.”
However, the same market that allows Superior Pine to sell excess tracts at a healthy profit also makes it difficult to collect more land. As a result, when a tract becomes available, a lot of groups are looking at it.
“There is so much competition from everyone,” Griffin says. “Everybody wants to own more land now. With the concerns about inflation and land ownership, timberland ownership is a good inflation hedge.”
Even as Griffin pilots Superior Pine into new markets, the company still needs to navigate a tumultuous market for its forestry products.
With more than 100,000 acres, Superior Pine finds itself in the Top 100 forestry companies in the US and Canada. But it is still well below the massive conglomerates, according to Mendell.
The company’s forest produces wood used for building materials, lumber, plywood and many different paper products. “Primarily, a lot of our trees are delivered to pulpwood processing facilities due to the great prices” Griffin says.
With the rise of online shopping during the pandemic, the demand for paper products has risen sharply.
Lumber prices have also spiked during the pandemic. Pulpwood prices have improved, but solid wood prices remain stubbornly flat.
“Solid wood product prices took a big drop back in 2008 and just really haven’t recovered,” Griffin says. “We just haven’t seen stumpage prices rise significantly where we’re selling the wood to the different manufacturing facilities.”
While Griffin says he “continues to press” the mills, there hasn’t been much movement. Over the past decade, there has been consolidation as foreign and institutional investors have purchased many mills. That has changed the business.
While Stone says consolidation among sawmills has taken away competition (which makes it easier for mills to hold the line on pricing), there is also an oversupply of trees, a commodity item. The problem began when construction slowed during the global financial crisis. He estimates that it will take seven to 15 years to work through that backlog.
“There are more trees now than there ever have been,” Stone says. “Therefore, there’s more raw material out there for them to choose from. They control the price.”
The competitive environment has changed, with mills selling their land to timberland investment management organizations funded through pension funds or institutional investors.
“It’s a lot of competition, and you have to be savvy,” Griffin says. “You have to reach out and touch a lot of people to build networks and relationships that in turn build trust.”
Fortunately, over their almost 100 years in business, Superior Pine’s leaders have built durable relationships that should help the company navigate climate issues, low prices or any other challenges that lie ahead.
“I’ve been working with [Superior Pine] through three different presidents,” Nimmer says. “To this day, I would say that you could trade with them without a contract and without a lawyer involved. You can just shake hands. Their word is their bond.” ■ Les Shaver is a business reporter with more than 20 years of experience. He has written for a number of publications and covered a variety of industries, including defense, automotive, commercial and residential real estate.
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