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Fourth quarter loss has no adverse impact on LP's new OSB plant Despite the fact that Louisiana- Pacific posted a $25 million 2006 fourth quarter loss with its CEO blaming the slow sales of building materials, especially OSB, work continues on LP's new OSB mill in Clarke County. For the full year, LP reported net income of $124 million. In 2005, the company reported $456 million in net income. LP Chief Executive Officer Rick Frost said in a recent press release, "2006 began with solid product demand. Building activity and demand began to weaken in the second quarter and continued to fall throughout the remainder of 2006. The largest impact of the weakened demand on our business has been the dramatic decline in OSB price. LP was profitable through the first three quarters, but the fourth quarter loss lowered earnings for the year to $1.17 per share." Mary Cohn, LP public relations spokesperson relayed the thoughts of Jeff Wagner, LP's executive vice president for OSB. "LP capital has been designated for investment in existing new mills-fourth quarter results do not affect that," Cohn stated in an email. She said LP anticipates and prepares for downturns in the market cycle and that the company has a "strong" balance sheet. "Clarke County is moving ahead as planned. Our target remains to produce the first board at the Clarke County plant by the end of 2007 and the entire project is focused on reaching that target." The project has had a few delays. It was initially scheduled to start production in the fall of 2007. Clarke County Commission Chairman Paul Bradford said, "Louisiana-Pacific's business is cyclical. They would not have invested the millions they have here in Clarke County with any idea of shutting the plant down before production even starts." The Clarke County plant is a $215 million project and will directly employ 130 when it starts up. In addition, 300 indirect jobs are expected to be created. The plant is located in the North Clarke Industrial Park, just off of Highway 43. Clarke County provided the land and other incentives for the plant but still has acreage in the park for other development.
The state provided nearly $5 million in Industrial Access Funds to build a road from the Kelley Flat vicinity on Highway 43 into the plant site. It includes an overpass over the Norfolk Southern Railroad that will serve the plant and the park.
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