Deltic Timber's Ray Dillon on Staying Smart When Branching Out

by Arkansas Business Staff  on Monday, Jul. 21, 2014 12:00 am  

Ray C. Dillon

Ray Dillon, who has led Deltic Timber Corp. of El Dorado since July 1, 2003, also works with both industry trade associations and community-oriented nonprofit organizations.

In addition to his duties as president and CEO of Deltic, Dillon is a member of the company’s Board of Directors. From 2000-03, he was an executive vice president of Gaylord Container Corp. at its corporate headquarters in Chicago. Prior to that, he was vice president of primary products and mill operations at Gaylord Container. He received a B.S. in chemical engineering from Mississippi State University in 1977. While serving on Gaylord Container’s senior management team, and directly responsible for five of the corporation’s divisions, he earned a Master of Business Administration degree from the University of Chicago in 2000.

Please describe Deltic Timber and your role there.

Deltic Timber is a vertically integrated natural resources company focused on the efficient and environmentally responsible management of its land holdings. The company owns approximately 530,200 acres of timberland, operates two sawmills and a medium-density fiberboard plant and is engaged in real estate development. Since becoming president and CEO at Deltic Timber, I’ve sought to bring an intense focus on efficiency, financial performance and personal accountability to all levels of the company’s operations.

Many in the timber industry have expressed worry about a shrinking workforce with many people having left the industry because of the recession and other factors, such as the increasing need for capital-intensive technology. Do you see this as a problem, and if so, how should the industry address it?

The wood products industry is no different from any other industrial manufacturing business as it relates to concern for an adequate workforce. Efforts are being made at both the Arkansas State Chamber of Commerce and the Associated Industries of Arkansas to educate and inform school guidance counselors regarding the possibilities of a rewarding career in manufacturing. At Deltic Timber, we have been able to recruit and retain the talent necessary to improve our operational performance each year. Looking into the future, a comprehensive immigration policy is an essential part of the solution for tomorrow’s workforce.

How has increasing overseas demand for Southern pine lumber affected Deltic’s operations? Do you expect demand to continue to increase?

Export demand for Southern yellow pine lumber has allowed Deltic’s sawmills to operate at higher utilization rates. Yes, I think demand for Southern yellow pine will continue to increase due to the demand for it in China and India.

How did Deltic’s acquisition of Del-Tin Fiber, which manufactures medium-density fiberboard in a facility near El Dorado, affect the company?

Deltic’s acquisition of the other half of the ownership interest of Del-Tin Fiber was both timely and strategic from the extension of our belief in vertical integration. As a result of this acquisition, Deltic’s revenue will now exceed $200 million on an annualized basis.

2013 was a good year for Deltic, with net income of $26.2 million, a record for the company. What’s behind that record?

Deltic’s record performance in 2013 was driven from operational excellence in our manufacturing operations derived from a continuing recovery in the residential housing markets.

The recession took a toll on the timber industry. What lessons did Deltic learn from the downturn?

Lessons learned at Deltic from the Great Recession were: 1 Expect the unexpected. 2 Operate as if you are going out of business everyday. 3 Protect the balance sheet.



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