December 2005

Koch Industries to Acquire Georgia-Pacific for $48 Per Share in Cash
Georgia-Pacific Corp., headquartered in Atlanta, and Koch Industries, Inc., based in Wichita, Kan., have reached a definitive agreement for Koch Forest Products, Inc., a wholly owned Koch subsidiary, to make a $48 per share cash tender offer for all shares of Georgia-Pacific. The transaction has been unanimously approved by the boards of directors of Georgia-Pacific and Koch. The transaction has an equity value of $13.2 billion and a total enterprise value of $21 billion, including all Georgia-Pacific debt. The price to Georgia-Pacific shareholders represents a premium of 39 percent based on the closing price of Georgia-Pacific common stock on Nov. 11.

At press time, Koch Forest Products was to launch a cash tender offer for all outstanding shares of Georgia-Pacific common stock no later than Nov. 18, followed by a second step cash-out merger at the offer price. The closing of the tender offer is expected to be completed promptly, subject to customary closing conditions, including antitrust clearances in various countries.

The transaction is not conditioned on financing. Debt financing has been secured by Koch through Citigroup.

Georgia-Pacific will be operated as a privately held, wholly owned subsidiary of Koch Industries. Georgia-Pacific will continue to do business worldwide under the Georgia-Pacific name and continue to operate its businesses from its Atlanta headquarters as an independently managed company.

Included in the transaction are all assets of Georgia-Pacific, including its North America and international consumer products segments, as well as its building products, packaging, and paper and bleached board segments.

Lafarge to Expand Silver Grove Gypsum Drywall Plant
Lafarge North America Inc., headquartered in Herndon, Va., will invest approximately $120 million to expand the capacity of its state-of-the-art gypsum drywall manufacturing facility in Silver Grove, Ky.

The new gypsum wallboard line will increase the annual capacity of the plant from 900 million square feet to 1,600 million square feet. The expanded facility will meet the growing demands of Lafarge’s customers in the north central region of the United States and southern Ontario by increasing the supply and the range of products available in these markets.

Construction is expected to begin during the first half of 2006 and is scheduled to be completed in the second quarter of 2007.

In November 2004, Lafarge also announced that it was investing $75 million to substantially upgrade and double the capacity of its gypsum drywall manufacturing facility in Buchanan, N.Y. The project is proceeding as planned and is expected to be completed in mid-2006.

West Virginia Is Site of BPB’s New Wallboard Plant
BPB, headquartered in Tampa, Fla., will build its newest high-speed synthetic gypsum wallboard plant in Marshall County, West Virginia, adjacent to American Electric Power’s Mitchell Plant.

This new plant will provide significant environmental benefits for the local community. BPB will use synthetic gypsum, a byproduct generated by AEP’s clean air emissions project at the Mitchell Plant, as a high quality raw material for manufacturing its gypsum board. In addition, like all of the BPB plants in North America, this plant will utilize 99 percent recycled paper in the manufacturing process.

The new facility will operate at world-class manufacturing standards and will be commissioned in late 2007. This investment complements BPB’s plans for a similar high-speed synthetic gypsum wallboard plant in Roxboro, N.C., that is expected to come on-stream in late 2008.

USG to Expand Joint Compound Manufacturing Capacity
United States Gypsum Company, Chicago, will significantly expand manufacturing capacity for its ready-mixed joint compounds at its Jacksonville, Fla., plant.

The company is completely rebuilding the plant’s manufacturing operation, expanding the structure housing the operation, and adding warehouse and loading capacity. Construction is expected to begin in the first quarter of 2006, and the new facility is scheduled to be operational by the end of the year. The operation will incorporate the latest computer-controlled manufacturing technology and automated packaging equipment.

The Jacksonville plant employs about 425 people. In addition to joint compounds, it produces gypsum panels, powdered wall and ceilings textures, and the 100 percent recycled paper used in manufacturing wallboard. It also serves as a distribution center.

JM Announces New Nonwoven Glass Mat Production Line
Johns Manville, Denver, plans to build a new nonwoven glass mat production line at its facility in Etowah, Tenn. The new state-of-the-art, high-speed line will be capable of producing more than one billion square meters of glass mat per year. The line will be fully operational by early 2007.

The announcement takes place against the backdrop of an increasingly tight capacity situation. Glass mats are a key component in the manufacturing of asphalt roofing shingles, glass-faced wallboard and many specialty applications. According to industry projections, glass mat demand will exceed supply by 2006, making glass mat production the bottleneck in shingle and other finished-material production.

JM’s Etowah, Tenn., facility was selected as the site for this significant investment because of its strategic proximity to major roofing shingle and wallboard customers. Additionally, JM has two of its largest glass fiber furnaces located in Etowah.

Report Shows Green Building Market Could Reach $20 Billion Over Next Five Years
McGraw-Hill Construction has released a report indicating the environmentally responsible "green building” market will reach and $10 billion and $20 billion over the next five years. The report was released at the U.S. Green Building Council Greenbuild conference in Atlanta.

The findings of the Green Building SmartMarket Report show the following:

- Green building comprises approximately 2 percent of nonresidential construction starts in 2004, valued at $3.3 billion.
- By 2010, the green building market is expected to be 5 percent to 10 percent of nonresidential construction starts (excluding nonbuilding construction), valued from $10 billion to $20 billion.
- More than 70 percent of a representative sample of architects, engineers, contractors and building owners anticipate sales growth from green building.
- Currently, 60 percent of architects, engineers and contractors are specifying and installing green building products in their construction projects.
- Operating costs of green buildings are expected to be 8 percent to 9 percent lower than the costs for other buildings; green buildings are expected to have increased values of 7.5 percent.

The report also offers recommendations and suggestions about business opportunity areas highlighted by the research. To purchase the report, please visit www.construction.com/smartmarket/greenbuilding/ or http://www.usgbc.org/smartmarketreport/.

MSHA, Gypsum Association Officials Sign Alliance Agreement
The U.S. Department of Labor’s Mine Safety and Health Administration has formed an alliance with the Gypsum Association to foster safe and healthful aggregate operations nationwide. The top leaders from the two groups signed the agreement at the Gypsum Association’s fall meeting in The Woodlands, Texas.

"This alliance agreement with the Gypsum Association enables us to partner with organizations to prevent workplace injuries and illnesses,” said David G. Dye, acting assistant secretary of labor for mine safety and health. "We have agreed to advance safety and healthful working conditions for workers by providing technical assistance, education and training, sharing information and promoting the national dialogue on mine safety and health.”

"Our industry has worked diligently to amass an excellent historical safety record for both in-plant operations and mining and quarrying facilities,” said Michael A. Gardner, executive director/chief executive officer, Gypsum Association. "Our new partnership with MSHA will allow our association members to learn about new and different safety methods, and it will provide us with opportunities to exchange safety information with MSHA in an open and educational forum.”

Under the agreement, MSHA and the Gypsum Association will work together to achieve the following technical assistance and education and training goals:

- Administer analyses to identify hazards affecting the health and safety of the alliance’s miners.
- Analyze historical data to evaluate the effectiveness of compliance and safety.
- Conduct evaluations of certain applied engineering topics to improve mine safety and health in gypsum mines and facilities.
- Perform mine safety and health case studies to determine areas for improved safety.
- Use evaluations and case studies to set objectives and performance-based goals.
- Develop training and education programs to reduce and prevent mine hazards.

Both organizations will work to raise awareness about mine safety and health by expanding outreach efforts and communication through print and electronic media and industry conferences.

MSHA’s primary mission is to ensure worker safety and health in the nation’s mines. More information on the alliance can be viewed on the Internet at www.msha.gov.

September Construction Slips 2 Percent
New construction starts retreated 2 percent in September to a seasonally adjusted annual rate of $657.8 billion, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies. While the housing sector continued to perform at a healthy pace, nonresidential building lost momentum. Through the first nine months of 2005, total construction on an unadjusted basis was reported at $492.4 billion, up 8 percent compared to the same period a year ago.

September’s data produced a 198 reading for the Dodge Index (1996=100), down from a revised 202 for August. With the Dodge Index averaging 191 through the first nine months of 2005, September was still well within the upper half of this year’s range. In the first two months of 2005, the Dodge Index averaged 180, followed by a 186 over the next three months. Construction activity was then very strong during the June–August period, as the Dodge Index averaged 202. September, although down slightly, remained very close to the elevated pace witnessed over the summer.

Nonresidential building in September dropped 8 percent to $165.5 billion (annual rate). The commercial sector was mixed, with declines for offices, down 5 percent; and hotels, down 26 percent. On the plus side, gains were reported for stores, up 4 percent; and warehouses, up 37 percent. The manufacturing plant category was down a sharp 76 percent from August, which included the start of a very large semiconductor plant in Arizona. If this large project is excluded from the August statistics, then September would still be down 58 percent, as new starts for manufacturing buildings struggle to regain an upward trend. On the institutional side of the nonresidential market, school construction in September settled back 3 percent, and healthcare facilities fell 23 percent. Showing growth in September were public buildings, up 2 percent; and transportation terminals, up 146 percent.

Residential building in September grew 2 percent to $393.6 billion (annual rate). Single-family housing improved an additional 2 percent, while multifamily housing held steady with its heightened pace of recent months. Multifamily housing in September continued to be supported by a number of large condominium projects. September showed residential building performing as follows: the West, up 5 percent; the South Atlantic, up 2 percent; the South Central, up 1 percent; the Midwest and Northeast, each down 2 percent.

The 8 percent increase for total construction starts during the first nine months of 2005 was the result of this pattern by sector: residential building, up 13 percent; nonbuilding construction, up 8 percent; and nonresidential building, steady with the same period of 2004. By geography, total construction showed this year-to-date performance: the South Atlantic, up 12 percent; the West, up 11 percent; the Northeast, up 9 percent; the South Central, up 8 percent; and the Midwest, up 1 percent.

People & Companies In the News
Micore® Brand Mineral Fiber Board from the Industrial Products Division of United States Gypsum Company, Chicago, has been certified for classroom use in California schools after meeting standards for low emissions of volatile organic compounds and formaldehyde. Tests conducted in accordance with procedures adopted by California’s Collaborative for High Performance Schools, a program intended to help achieve better indoor air in classrooms, confirm that both the product’s VOC and formaldehyde emission levels are well within CHPS requirements. As a result, the product now meets Section 01350 of the CHPS Material Specifications.

Master Wall has added Randall Cowart as its Southeast regional sales manager. Cowart brings 25 years of sales management and service experience in the EIFS and stucco market along with a support from both new and existing Master Wall customers. Working from his home base in the Atlanta area, his territory includes the greater majority of the Southeast including Florida and Georgia (excluding Southwest Georgia and the Panhandle), North Carolina, South Carolina, Eastern Tennessee and Virginia.

Georgia-Pacific Corp., Atlanta, has named Miloy Summerell as its building products public relations manager. Summerell will be responsible for communicating product knowledge and brand strategies to key media, primarily national trade publications. A seasoned media professional, Summerell has extensive experience with public relations practitioners from the editorial side. Most recently, she served as a marketing copywriter on the e-commerce solutions team at NCR, Corp., based in Columbia, S.C.

On the 130th anniversary of its founding, Toshiba Corporation, headquartered in Tokyo, Japan, named Ray O’Connor, CEO of Topcon Positioning Systems of Livermore, Calif., as recipient of Toshiba’s prestigious Business Performance Award.

As the primary shareholder of Topcon Corporation, Toshiba has benefited from the exponential growth of Topcon’s positioning instruments business throughout the world. Among all of its subsidiaries, Topcon Positioning Systems is the most profitable and contributed significantly to Topcon’s dramatic rise in stock value on the Nikkei Stock Index.

Each year Toshiba recognizes outstanding performance within its extended company by presenting the special award. This year, for the first time in the 130-year history of Toshiba, the Business Performance Award was presented to a person of non-Japanese descent.

O’Connor received the award in recognition of his "superior leadership and performance” in creating a leading market share for Topcon Precision Positioning products in the world civil engineering and construction markets. Toshiba President and CEO Atsutoshi Nishida presented the award in a recent ceremony at the company headquarters in Tokyo.