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History of Mead

This history of Mead spans four distinct eras:

1. From 1846 to 1915, when the company gained a sound footing as a manufacturer of white paper.
2. From 1915 to 1955, when Mead developed into a broadly based paper and paperboard maker.
3. From 1955 to 1980, when Mead diversified from its traditional businesses into furniture, industrial and high technology markets.
4. From 1980 onward, the company has divested several non-forest products businesses and focused its resources on forest products.

1846

In 1846, Colonel Daniel Mead helped establish Ellis, Chafflin & Company in Dayton for the manufacture of book and other printing papers. Colonel Mead shared in the ownership and operation of the company until 1882, when he became sole owner and adopted the name The Mead Paper Company.

1890

Eight years later The Mead Paper Company became a two-division operation by purchasing the pulp and paper mill of Ingham Mills & Company in Chillicothe, Ohio. The Chillicothe mill occupied about an acre of ground on the site of Mead's present paper mill. The mill was distinguished as one of the first paper mills west of the Alleghenies to make paper from wood pulp.

1905

The Mead Paper Company encountered difficult years after Colonel Mead's death in 1891. By 1905, the company was on the brink of bankruptcy. In order to salvage the company, a group of Chillicothe bankers asked George H. Mead, grandson of Colonel Mead, to aid in a reorganization. As a result, The Mead Pulp and Paper Company, with George Mead as general manager, was formed. To obtain funds for growth, Mead's first public stock issue was made in 1906. A year later the equipment in Dayton was moved to Chillicothe, consolidating the company at one location.

During the next 40 years, Mead grew steadily as new assets were acquired and existing ones strengthened.

1920

In 1920, Mead purchased a pulp mill in Kingsport, Tennessee. Originally developed from a tannin extract plant, the Kingsport mill began making white paper in 1923 and became one of Mead's major production sites.

1930

On February 17, 1930, the company was reorganized and incorporated in the State of Ohio under its present name, The Mead Corporation. At that time Mead had plants in four states and about 1,000 employees. Five years later Mead's common stock was listed for the first time on the New York Stock Exchange (1935).

1936

Mead and Scott Paper Company jointly built the Brunswick Pulp & Paper Company at Brunswick, Georgia, in 1936. This mill, owned by each firm on a 50-50 basis, was expanded a number of times. In 1942, Mead purchased a small white paper mill from the Escanaba Paper Company in Michigan's Upper Peninsula. Thirty years later Escanaba became the nation's publishing paper center with a $135 million expansion of Mead's pulping and papermaking facilities. Another $300 million expansion at Escanaba was completed in 1982 and $80 million in pulp mill and paper machine improvements have been made since then.

1944

Corporate offices were moved back to Dayton.

1946

Mead celebrates 100 years of papermaking.

Mead gained a broad line of papers in 1955 with its acquisition of the Chillicothe Paper Company, adjacent to the long-established Mead mill.

Mead began to broaden its product line beyond white papers as far back as the 1920s with a move into the manufacturing of paperboard. Mead-sponsored research during the early part of that decade led to the discovery of the semi-chemical pulping process which offered a means of converting waste-wood chips, principally from the production of tannin extract, into a marketable product—paperboard corrugating medium. Then, in the late 1920s, Mead acquired several extract plants in the Appalachian area and installed machines to produce corrugating medium from spent wood chips. One of these was at Lynchburg, Virginia. Two similar mills were later sold or closed at about the time Mead began producing corrugating medium in 1975 at a large, new paperboard mill in Stevenson, Alabama.

1952

Clinching Mead's strength in paperboard manufacturing were the company's joint ventures with Inland Container Corporation in building and operating the Georgia Kraft Company containerboard mills in Macon and Rome, Georgia (1954 and 1951), and Phenix City, Alabama (1966). Mead also manufactured paperboard specialty products at its Lynchburg, Virginia, facility, and eventually acquired mills in Cincinnati, Ohio (1955), and Otsego, Michigan (1968), and built a converting plant in Macon, Georgia (1965).

The third phase of Mead's history began in 1955. That year Mead began a series of steps that were to make the company a diversified, billion-dollar corporation in less than 20 years.

The first step was the 1955 acquisition of a controlling interest in the Jackson Box Company of Cincinnati, Ohio. Jackson Box, a manufacturer of corrugated shipping containers, was acquired outright the following year. The firm became the nucleus of Mead's Containers division.

1957

Mead ventured into another new market when the Atlanta Paper Company—now known as Mead Packaging—became a part of the corporation in 1957. With five plants in the U.S. and eight more in other nations, the Mead Packaging division is the world's largest supplier of paperboard beverage packaging. The division pioneered the modern-day six-pack bottle carrier and has been the leading innovator of 12-pack and other multiple packaging systems for the food and beverage industries.

Mead's move into technical and specialty papers dates to the acquisition of the Hurlbut Paper Company (South Lee, Massachusetts) in 1957. Now known as the Specialty Paper division, it manufacturers a wide variety of papers used in decorative laminates for counter tops and furniture, as well as for other industrial applications. Additional expansion into the printing and design of such papers was made with the purchase of Morart Gravure (South Lee and Dayton) in 1964. (The Morart operations were sold in 1986.) Mead entered into a joint venture with Felix Schoeller Jr. in 1968 to manufacture photographic and technical papers.

The first merchant house to join Mead did so in 1957; others followed over the next several years. By the mid-1970s, the Mead Merchants system included 35 houses across the East and Midwest and was a potent force in the wholesale marketplace.

1960

In 1960, Mead acquired the Gilbert Paper Company of Menasha, Wisconsin. Gilbert is a leader in the manufacture of cotton-fiber, letterhead and stationery papers, cover and text papers for business and security papers for stock certificates and legal documents. Also in 1960, Mead created its first foreign subsidiary—Mead S.A., in Switzerland—to manage and develop the corporation's European interests. Today Mead and its affiliates have manufacturing operations in Canada, Mexico, France, the Netherlands, Italy, England, Spain, Germany, Austria, Japan, Australia, Korea, Hong Kong and Brazil, as well as major sales offices and licensees in more than a dozen other countries. In addition, through its interest in affiliate Northwood Forest Industries Limited (completed in 1966 and owned jointly by Mead and Noranda Forest Inc.), Mead has substantial holdings in Canada (a pulp mill, several sawmills and plywood operation) and the U.S. (oriented structural board operation), all backed by extensive agreements for timber harvesting on Canadian woodlands.

1966

In 1966, Mead acquired Westab, Inc., of Dayton, Ohio, now part of the School and Office Products division. This business unit—with 8 plants nationwide and one in Mexico—is the largest manufacturer and distributor of school supplies in the country. They also manufacture and distribute home and office supplies and stationery.

1968

Two other acquisitions in 1968 considerably broadened the scope of Mead—Data Corporation and the Woodward Company. Data Corporation of Dayton, Ohio, later called Mead Technology Laboratories, developed technology which led to new Mead businesses in electronic information storage and retrieval. Using this technology, Mead Data Central was formed in 1973 and developed the LEXISR and NEXISR systems. LEXIS is the world's leading computer-assisted legal research service, and NEXIS is the leading full-text search and retrieval service for news and business information. MDC is also growing its services for finance, accounting and government markets. Mead Technology Laboratories was also responsible for the development of an ink-jet printing business, called Mead Digital Systems.

Woodward Company became the Mead Industrial Products group, producing ductile and gray-iron castings, molded rubber products and low-sulfur metallurgical coal. One of its divisions—Lynchburg Foundry—was the nation's leading supplier of precision castings for automotive, air-conditioning and machinery industries.

1977

In 1977, Mead acquired the Houston, Texas-based Gulf Consolidated Services, a major distributor of pipes, valves, fittings and electrical supplies to the oil-field and power generating industries.

Mead's Interior division, which was developed around the acquisition of Payne Fabrics (1967), Stanley Furniture Company (1969) and Norman's of Salisbury (1977), was sold in 1979. In the 1970s, Mead was a top performer in an industry that was thriving on a robust economy. The company was number one in earnings growth and second in total return to investors. At the same time, however, many of its facilities were becoming less and less efficient with age. For example, the 12 paper machines at the Chillicothe mill averaged over 60 years of service.

As a result of an intensive analysis of facilities and objectives, the company launched a five-year, $1.5 billion modernization and expansion program in the late '70s. The expansion program included new paper machines at Chillicothe and Escanaba and the doubling of a pulp mill at Northwood Forest Industries, a Canadian affiliate.

Mead's businesses were hit hard by the recession in the early 1980s, and in 1982 the company recorded a loss of $86 million, its first loss in 44 years. Because of high interest expenses and costs associated with expansion programs, debt rose to 53 percent of total capital from the normal 30 to 40 percent level.

In the depths of the recession, the company's strategic focus returned to forest products, where expansions would be providing an additional 30 percent capacity in paper and 40 percent in market pulp. The company also committed to aggressive growth of its electronic publishing business which had achieved a leadership position.

1980's

In late 1982 and 1983, a major restructuring of the company was initiated, including the divestiture of major non-forest products businesses, representing 20 percent of 1982 assets, and the trimming of ongoing businesses. Included in the restructuring was the sale of the remaining assets of the Woodward merger—Mulga Coal in 1982 and Lynchburg Foundry and Murray Rubber in 1983 -- and the sale of Gulf Consolidated Services, also in 1983. Mead sold five of its 20 container businesses and closed a sixth during the same year. Employment in ongoing businesses was reduced by 8 percent.

By the time the U.S. economy began to recover in 1983-84, Mead had established a modern, cost-effective asset base in paper, paperboard and pulp which moved the company's performance from the bottom of the industry into the top quartile.

During the next several years, the company continued to sharpen its focus on forest products and electronic publishing while divesting non-strategic assets. In 1984, Mead sold an analytical laboratory (CompuChem), and in 1986, Mead sold its 50 percent interest in Schoeller Technical Papers. As part of the Schoeller sale, Mead obtained full ownership of Schoeller Release Products—which it renamed Mead Release Products—a West Chicago plant which produced release liners (peel-off papers and film). The business grew and operated profitably under the name Mead Release Products but no longer fit Mead's strategic thrust, so it was sold in 1989. During 1986, Mead also sold its 50 percent interest in Altonaer (a German manufacturer of corrugated containers) and its 27.4 percent interest in British Columbia Forest Products. During 1986, Mead announced plans to withdraw from its Reinsurance business.

Concurrent with its efforts to streamline its operations, Mead continued to invest in research and product development. In 1984, the company launched its new Mead Imaging division in Dayton to develop light-sensitive papers for low-cost color reproduction, an outgrowth of Mead's work in carbonless coating technology. After the market for color copiers failed to mature as expected, Mead repositioned Mead Imaging at the end of 1990 and decided to concentrate investments on other areas of business.

With assets for its major base businesses in place by the mid '80s, Mead launched a program to expand its participation in less capital intensive and less cyclical businesses. The expansion was designed to provide the company with greater flexibility in its capital program and a more consistent level of returns during all economic cycles. The first step in that strategy was the $250 million acquisition of the West Coast-based Zellerbach Distribution Group in September, 1986. Zellerbach's distribution operations in 42 cities expanded Mead's distribution network coast-to- coast, which now has 65 locations covering more than 30 states. The acquisition made Mead one of the largest paper distribution operations in the country. Mead Merchants and Zellerbach Paper were reorganized into one operation—Zellerbach—in mid-1988.

The second major step in Mead's expansion into less capital intensive businesses was the acquisition of the Ampad Corporation in December, 1986. Ampad, which had been based in Holyoke, Massachusetts, markets paper-related office supplies through commercial channels. Mead Products and Ampad became business units of the Mead School and Office Products division in mid-1987. However, channels for the sale of commercial office products changed dramatically in the late 1980s, making it difficult to develop synergy between Ampad's product lines and Mead's existing office products and school supplies lines. Mead sold Ampad to Bain Capital in July, 1992, and now concentrates on manufacturing and selling school, home and office supplies through retail markets.

In February, 1987, Mead announced the major restructuring of its paperboard operations to focus greater emphasis on higher value-added coated board production. The restructuring included the dissolution of the Georgia Kraft joint venture with Temple-Inland; the sale of six container plants to fit a small containerboard operation; and the doubling of coated board capacity. Georgia Kraft's Macon, Georgia, mill was sold in September, 1987 to Pratt Holding Ltd., an Australian firm. In January, 1988, Temple-Inland took full control of the Rome, Georgia, linerboard mill and Mead took full control of the Phenix City, Alabama, coated board mill.

In July, 1987, six corrugated container mills were sold to Weyerhaeuser and the remaining eight container plants were realigned with Mead's Stevenson, Alabama, corrugating medium mill to form the Mead Containerboard division.

Mead announced its decision to double the capacity of its coated board mill near Phenix City, Alabama, in November, 1987. The $580 million expansion is the largest in Mead history and adds 370,000 tons of coated board capacity. The expansion started up in late-1990, making Mead a world leader in coated paperboard.

At year-end 1987, Mead acquired the Indianapolis carbonless coating facility of Standard Register Company. The acquisition added 30,000 tons of coating capacity and provides for additional carbonless expansion.

1988

Early in 1988, Mead sold its recycled Paperboard Products business to the privately-held Rock-Tenn Company. The division had mills in Lynchburg, Virginia; Cincinnati, Ohio; Otsego, Michigan; and a converting plant in Macon, Georgia.

In August, 1988, Mead sold its 50 percent interest in the Brunswick Pulp & Paper Company to Georgia Pacific for $665 million. Proceeds from the sale were used in part to fund construction of the company's new coated board mill in Alabama.

Mead's electronic publishing subsidiary, Mead Data Central, Inc. (MDC), sustained high levels of growth in the 1980s. MDC made a number of significant acquisitions including The Michie Company, a leading publisher of law books and state statutes, and the Illinois Code Company, a national firm specializing in document filing, searching and retrieval for state and county records related to Uniform Commercial Code (UCC) transactions, tax liens and incorporation records. At the end of 1992, MDC acquired Folio Corporation, a small company which has successfully pioneered in the development of information software products. In 1994, Mead sold Mead Data Central to Reed Elsevier, PLC for $1.5 billion. The sale was based on Mead's decision to focus on its core forest products business, devoting resources to the company's key areas of expertise.

1992

In 1992, Mead announced an aggressive company-wide performance improvement program. This effort, aimed at improving Mead's ability to achieve consistently higher performance, has focused on increasing customer satisfaction, achieving productivity gains in each business and building a high performance organization. The change program has developed the potential for consistently superior performance. The change now underway emphasizes new and higher standards of performance in meeting the needs of customers, shareowners and employees.

1994

In 1994, Mead acquired Hilroy, Canada's premier school and office products company, from Abitibi-Price, Inc. The following year, Mead sold its Kingsport, Tennessee, uncoated paper mill to Willamette Industries. In 1996, Mead acquired a large integrated coated and specialty paper mill in Rumford, Maine, from Boise Cascade for $640 million. The acquisition broadened the company's product line to cover all major coated grades, increases fiber self-sufficiency by adding 667,000 acres of timberland, and provides significant opportunities for synergies and cost-effectiveness through a three-mill coated paper system.

A new medium machine, S2, started up at the Containerboard Division's Stevenson, Alabama, mill in September 1996. The machine added 228,000 tons per year of capacity. Mead also completed a $224 million capital investment program to expand the capacity of the new machine and upgrade environmental systems in May 1998.

1998

In June 1998, Mead announced an agreement to sell its Zellerbach distribution business to International Paper for $263 million. Under the agreement, Zellerbach would become part of IP's distribution business, known as xpedx.

Also in June 1998, Mead announced several initiatives designed to improve productivity and further sharpen its focus on the company's core business -- coated and specialty papers, packaging and paperboard, and school & office products. The actions included the intent to sell the following non-strategic assets:

Mead Ink Products, a provider of inks for Mead's packaging business and the packaging industry

Northern Hardwoods, a hardwood saw mill in South Range, Michigan, and approximately 50,000 acres of surrounding timberland

Selected real estate in Dayton and San Francisco

Undeveloped mill sites in Tennessee, Kentucky and Michigan

The company also announced that it would take a pre-tax charge of approximately $80 million against second quarter earnings for losses associated with Zellerbach and the writedown of certain other assets.

At the same time, Mead combined its Publishing Paper and Fine Paper divisions to form a new Mead Paper Division, based in Dayton. The new division, comprising the Escanaba, Rumford, and Chillicothe mills, was intended to more effectively provide a broad line of quality products and services to the marketplace and increase productivity by better leveraging the skills and capabilities of the organizations.