CORPORATIONS: Ply Again

At 35, Lawrence Ottinger was a somewhat spectacular failure. He had spent 14 years and $100,000 of his father’s money on half a dozen promising but luckless business ventures. Now he had a new idea but he was reluctant to tap his father again. So Ottinger borrowed $500 from his mother. With it, he started a small company with a big name: United States Plywood.

Last week President Ottinger, now 66, rose before his stockholders in the plywood-paneled Manhattan offices of the world’s largest plywood producer to report on his company. In August, sales had set a new monthly record of $9,600,000, and this year they would easily top $100 million (v. last year’s $69.2 million). Barring higher taxes, Ottinger predicted that U.S. Plywood’s net profit would be $9,000,000 this year ($6.18 a share), more than double last year’s.

Furthermore, he said, there was no danger of any wartime shortage of plywood, thanks to the enormous expansion of plywood production. The industry is currently producing fir plywood at the rate of 2,800,000,000 board feet a year, double the production rate established in World War II.

Ill Wind. It was an ill wind, in fact a hurricane, which blew Ottinger into the plywood business. Part of his father’s $100,000 had been used to buy a big grove of gum trees near Corbin, La., in an experiment to dye living trees to make the wood look like mahogany. The experiment worked but nobody wanted to buy the wood, so Ottinger lost his shirt. When a hurricane blew down so many nearby oak trees that Ottinger got them just for hauling them away, he found himself in the lumber business. He became such a lumber expert that during World War I he was appointed boss of all U.S. plywood production.

At war’s end, Ottinger saw a big future in plywood, then considered good for little but chair bottoms and automobile floorboards. It also had a bad name because it warped and split. Ottinger started as a jobber in plywood, devised new uses for it, cleaned up in the recession of 1921 by buying vast quantities of plywood at the bottom of the slump, selling for a fat profit on the rise.

U.S. Plywood had been grossing more than $1,000,000 annually for seven years when in 1932 Seattle bankers asked Ottinger to take over a big plywood mill that faced bankruptcy. His stiff terms: 50% of all profits and none of the losses. The bankers agreed, and wisely; the mill has made profits ever since. Ottinger bought other mills, acquired vast stands of timber.

Blown Good. By tireless promotion, heavy advertising and constant research in new techniques, Ottinger has done more than any other man to raise the once-despised plywood to its present lofty status. By binding plywood to metal, Ottinger and his technicians opened up new markets for the material (in trains, truck bodies and shipping containers). They perfected a thin hardwood veneer as flexible as cloth, turned out a wall covering that cannot be distinguished from solid paneling. They even turned out plywood pipe, got $5,000,000 worth of orders for it in World War II as a light, portable radar mast. Of the 20 basic plywood and related products now sold by Ottinger, the newer ones include plywood office doors as fireproof as steel, and tabletops which cigarettes cannot mar.

Ottinger, who is so full of nervous energy that he seldom sits still for five minutes, is not letting U.S. Plywood rest on its spectacular growth. This week he announced the completion of a new $600,000 hardwood-veneer mill in the Belgian Congo. Next month, at a new $2,000,000 plant in Anderson, Calif., he will start production of a new plywood, “Novoply,” whose exclusive U.S. rights he bought from its Swiss inventor. It is, says Ottinger, the first successful use of waste wood chips as a satisfactory center for plywood panels, will cut production costs so tremendously that it will revolutionize the industry.