When we announced our intention to acquire Georgia-Pacific in 2005, it caught many people by surprise. After all, Koch was considered an oil company and had no background in pulp and paper. But as I explained in my booklet on virtuous cycles last year, we believed GP fit with our process industries capabilities. More than 15 years of ownership have validated that belief.
Steve Feilmeier, our new CFO at the time, had a bit of fun explaining all this to the media and analysts: “Two things are for certain: death and taxes. But the next most certain thing seems to be toilet paper. We believe demand should be fairly steady, regardless of what is going on in the economy.”
Never in my life did I imagine people would hoard toilet paper. But last spring, as fears of COVID-19 prompted lockdown orders, it seemed like every roll on every shelf vanished overnight. Canned soup disappeared, too, along with diapers, bottled water, hand sanitizer and disinfectant. The changes didn’t stop there.
Fewer planes took off and fewer cars were on the road, lowering demand for FHR’s production of gasoline, ethanol and especially aviation fuel. A steep drop in automotive sales did the same thing to INVISTA’s air bag fibers and polymer businesses. The sudden halt in new commercial and industrial construction dealt a severe blow to the markets for Guardian’s architectural glass and KES’s design/build services.