Paul Boynton became the Chief Executive Officer of Jacksonville-based Rayonier on Jan. 1 and now runs a company that owns nearly 2.7 million acres of timberland in ten U.S. states and New Zealand.
It also owns pulp mills in Fernandina Beach and in Jesup, Ga.
Boynton, 47, joined the company in 1999 as director of performance fibers marketing and sales and was promoted through the ranks. He was named president and COO in 2010.
He will become chairman in May upon the retirement of Lee Thomas.
The company operates in three major categories: forest resources, performance fibers and real estate. It has 1,800 employees.
It reported revenues of $1.49 billion for fiscal 2011, up 13 percent from $1.32 billion in 2010.
Before joining Rayonier, Boynton was with the 3M Corp. and before that, starting in 1986, was with Motorola.
The Daily Record interviewed Boynton for “First Coast Success,” a regular segment on the award-winning 89.9 FM flagship First Coast Connect program, hosted by Melissa Ross.
The interview is scheduled for broadcast this morning and the replay will be at 8 p.m. on the WJCT Arts Channel or online at www.wjctondemand.org.
These are edited excerpts from the full transcript and some additional information.
Would you summarize just what Rayonier is and does?
We are an 85-year-old company, headquartered in Jacksonville. In 2011, we had $1.5 billion sales revenue and market capitalization of $5.5 billion. We have 120 people headquartered here in Jacksonville, and we are traded publicly on the NYSE.
We have three primary businesses. The first business is timberland; we own and manage 2.7 million acres of very high quality timberland across the U.S., including nine states in the Southeast and New York as well as in the state of Washington. That makes us the seventh largest owner in the United States of land, and we are also the third largest owner of land in New Zealand.
We have a real estate business — of course if you own 2.7 million acres of land, you’re naturally in the real estate business. We’ve got a great team that looks at our land holdings and actively works to entitle those parcels for a higher and better use. Between Savannah and Daytona along the eastern corridor, we have 200,000 acres, and almost 40,000 acres of that is entitled for some future and better use.
Then finally, we’ve got the Performance Fibers business, and we are the world’s leader in highly purified cellulose fiber. This is basically a natural tree fiber that we engineer for a specific customer application. Applications range from LCD screens, a polarizing film that would go on that LCD screen, or into a pharmaceutical, or into a casing like sausages form. That’s our largest single business as well.
In a 100-mile radius from Jacksonville, we probably have 1,200 employees, at our two mills — in Fernandina and in Jesup — as well as the headquarters.
How would someone know that he or she has come in contact with a product that Rayonier had a hand in?
We are an industrial company vs. a consumer company, but if you shampooed your hair, used cream rinse, used toothpaste, there’s a good chance that already today, you’ve used our products five times.
In the community, you would see our property across the board. Our property is marked, saying it’s Rayonier property. Of our 1.9 million acres in the Southeast, the vast majority of that is leased to hunters. So a lot of people know Rayonier through the hunting program that we have.
Certainly if you’re in the industry, you know us.
If you’re active in transportation, you would. We use a lot of rail, we use a lot of trucks, a lot of oceangoing vessels. If you’re working at the port, people know us that way.
We are probably one of the top 20 container exporters in the United States.
Rayonier obviously is very influential in the economy. How is the economy for you, and for development, and for your land resources?
We, collectively as in the U.S. economy, have been through some tough years of the last five, and we had to adapt pretty quickly. As the housing market basically collapsed — housing starts over 2 million going to 500,000, a 75 percent reduction — you certainly had to respond very quickly to that. Basically, we took our foot off the pedal to make sure that we weren’t pushing real estate into a market that wasn’t going to value it as we think it should be valued for the long term.
We kind of backed off a little on the real estate side, and similarly, in our timberland.
A good portion of ours, maybe half in the Southeast and a majority in the Northwest, goes into lumber for housing. We backed off our harvest of that lumber.
At the same time we pushed forward by moving more product into the pulp mill area, which remained very strong.
Or we pushed more product into the biomass area, which is picking up. Or in the Pacific Northwest, which with the growing Asian economy we are able to sell more into that economy.
We were able to back off on some of our activities.
Then in our Performance Fibers business, those markets are actually relatively stable markets, even through the downturn. We were able to actually push our foot very hard in that business.
If you look at Rayonier’s performance in the last five years, our total shareholder return is well above 60 percent. We’ve had excellent results in probably one of the toughest markets in a century.
We see it improving, but it’s just going to take some time, certainly for the housing market.
You must adapt quickly. How easy is it to do that?
We are fortunate to have a workforce that’s very bright, very energetic, very on top of things, so we’re adjusting all the time. We adjust month to month, week to week.
Do you have any suggestions for small businesses that might want to learn how to adjust quickly?
The small business owner probably has that model down very well.
One of the things we do well at Rayonier is we have a real focus on what drives value for our shareholders, and with that focus, we’ve got everybody’s actions aligned to that, and so they understand if there’s an opportunity to move quickly, or if we need to back off quickly. We’re fine-tuned. My guess is the small business owner also has a very good feel for that as well.
Headquarters are considered the brass ring of the economic development. Rayonier moved to Jacksonville in 2000. What drove Rayonier’s decision to move to Jacksonville, and how has that worked out?
The underlying decision was to move our headquarters from the Connecticut/New York area to be closer to our assets, which naturally took us to the Southeast. So the question is, why Jacksonville? I think first and foremost, Jacksonville, the motto is today, ‘we’re open for business.’ We felt that in 2000. It has a healthy relationship between industry and government and we found that very attractive, so that was probably the primary reason.
No. 2, it’s a cost-effective place to do business. Real estate, office space, labor, as you contrast with the Northeastern U.S., it’s very attractive from that standpoint.
I’d say, three, there’s a good quality labor market here. Good quality people, strong educational system, hard-working folks, and so that was very attractive.
And I think for the special talent that we have to bring into the community, whether it’s technical or some other needs, it’s an attractive place to recruit folks into, and therefore, it’s an attractive place for our employees to live.
Jacksonville has a lot of big-city amenities — the Jacksonville Jaguars, world-class health care, an excellent airport facility. We have all the things of a great big city. At the same time, we’ve got all the comfort of a small-town feel.
On top of that, we have natural resources. The St. Johns River, beaches, pristine marshes, all that combined, makes it a great place to do business.
You mentioned a good quality educational system. We don’t hear that a lot.
There’s an understated value in the quality of our educational system. I think we have a lot of school options for our folks to move here. We have some excellent, well-known public schools, and we’ve got kids ourselves in public schools as well as in private schools. We have some excellent options in private schools and some of the best in the country on both sides. Is there an opportunity to do better? Absolutely. We’re helping as a company, we’re helping as individuals, to improve the quality of our school systems, but we have some excellent options there today.
The City and state approved incentives of $2.57 million for Rayonier to relocate its headquarters here in 2000 and create 85 jobs. The City and state are offering incentives of $6.6 million for Bi-Lo to move its corporate offices here, now that it owns Winn-Dixie, to preserve the existing 900 jobs and add 100 more. How important are incentives in making a relocation decision?
Incentives are important. I would not say it’s the most important, but they are a factor that gets considered in these conversations. It is part of the process. I can only imagine that if a city or region decides not to provide them, it becomes a real disadvantage for them to compete for new business.
How did Rayonier take ownership of those 2.7 million acres of land?
We started our company 85 years ago in the Pacific Northwest and along the Olympic Peninsula. We still have 400,000 or so acres in that area. Through time, we acquired more and more. In the 1930s, we first came to the Southeast U.S., because we saw the tremendous natural resource of wonderful growing pine, and there we made a large acquisition of land, and then we built our first Southeastern pulp mill in Fernandina Beach and from there we continued to grow our assets.
Our largest acquisition of recent times was in the early 2000s from Smurfit. We expanded our holdings quite a bit.
In 2011, we continued to push our acquisition strategy in timberland because we think it’s a great business to be in. We think we manage timber very well. We know we create value from that, and so in 2011, we acquired another 320,000 acres, mostly in the Southeastern United States. It’s been a gradual build through time, starting in the Pacific Northwest. Now our largest holdings are in the Southeastern United States.
What’s your hunting program?
The great thing about forest land and timber is it continues to grow, but it’s a long-term asset, so we always look at how else we can create value from that asset.
We have all kinds of programs. One of our largest is hunting. We lease out parcels of land in the Southeast and of our 1.9 million acres, probably 95 percent of that is leased to hunters.
It’s a great partnership, because the hunt clubs typically are great stewards of our land. They’re first to call if they see something wrong, if they see an issue, so it’s a great partnership between us and them. It gives them plenty of recreation and opportunity to be outdoors, so it’s a real natural synergy between us and the hunting community, and we’re glad to be part of it.
Rayonier moved to Downtown Jacksonville, first to the Northbank in the Bank of America Tower and then to the Southbank in Riverplace Tower. Why Downtown?
We think any strong metro area has a real vibrant Downtown, and we want to be part of that mission, and quite honestly, Jacksonville has a beautiful Downtown.
We were very happy with the space we had on the Northbank, and we love our space on the Southbank as well.
We think it’s important that our employees recognize that a vibrant Downtown is important for even the suburbs, and therefore, we end up spending a lot of time and a lot of our community dollars in supporting Downtown initiatives and we will continue to do that.
You are taking leadership of the company at a time there are other new leaders coming into Jacksonville. Shahid Khan bought the Jacksonville Jaguars and he just hired Mark Lamping to be the first president of the Jaguars in 15 years. Randall Onstead will be moving to Jacksonville to take over the merged Bi-Lo/Winn Dixie. There’s going to be new energy in corporate leadership in Jacksonville. What role do you want to play in that?
Personally, I want to be part of that leadership. As a company we want to be part of that. We have bright, energetic employees. They’re fully engaged at Rayonier, but when you’ve got bright energetic employees, they also want to be engaged in their communities. We encourage our employees to be part of the community.
We feel it’s our responsibility to push the community further. It has so much potential here, so we’re with Shahid Khan and everybody else who comes here to make sure this community continues to grow and is a place that we want to live, and our employees want to retire.
What are some of your plans?
In forest resources, we will continue to add timberland into our portfolio (we acquired 320,000 acres in the southeast in 2011). With these acquisitions, we automatically step up our real estate sales inventory as these large blocks have higher value properties.
In Performance Fibers, we plan to maintain our global leadership position through advances that further the performance gap between us and our competitors along with cost reductions through reliability and process improvements. For example, we’re putting a turbine in Fernandina that will allow us to sell power back to the grid. It will be operational later this year.
We announced a $300 million investment in our Performance Fibers business with an expansion at our Jesup facility to be operational in mid-2013.
Any other information or advice you would like to share?
Two points. I mentioned the success of Rayonier, and it’s important to recognize that success is 100 percent driven from the quality of people that we have on the team. It’s important to recognize these results come from hard work from good people. Second, managed forests are a very important part of all of our futures. Forests create jobs. Hundreds of thousands of jobs across the United States, and tens of thousands of jobs in our area, are created through forestry.
Beyond jobs, forests clean our air, filter our water, it’s habitat for wildlife, and it’s recreation for all of us, so supporting forestry, and solid forest policies, really is a benefit for everyone.
It’s a benefit to everybody to make sure that we have a really positively, actively managed forest program in the United States.
One last question I’d like to ask is how did Rayonier get its name?
In 1926, a gentleman from Chicago, a businessman named Ed Mills, started the Rainier Pulp and Paper Company, named after Mount Rainier. It wasn’t too long after he started it that DuPont came to Rainier as they were looking for an alternative source of fiber to make rayon. They were using cotton to make rayon, but the cotton crop really kind of went up and down. They saw these beautiful trees, which also had natural cellulose fiber, and they said, look, you’re a pulp and paper company, do you think you can make a fiber pure enough that we can use it as a source of rayon?
After about four years of our engineers working with their engineers, we did develop it, and we became the largest supplier into the rayon market. So we changed our name from the Rainier Pulp and Paper Co. to Rayonier. That’s the way it started, and that’s what we’ve been since.
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