|
NEWS
CORPORATE STRATEGY
IP to sell $1 billion in assets, cut jobs
International Paper Co. (IP) in July announced a sweeping restructuring plan that will eliminate 9,000 jobs, or 10% of its workforce. Most of the job reductions will come from the sale of assets and the shutdown of production facilities in the company's printing papers business in the U.S. and overseas. As part of the $1 billion in asset sales, IP said it plans to sell its imaging business, which makes photographic film, paper, and chemicals, including the Ilford brand; its multiwall bag business; and 175,000 acres of timberlands in western Pennsylvania and western New York. Additional sales of nonstrategic assets are expected to be announced over the next few months, according to Wall Street analysts who follow the company.
John T. Dillon, International Paper's chairman and CEO, said the company will be divesting or closing operations that no longer meet the company's financial or strategic objectives while utilizing the remaining assets more efficiently to serve customers.
"All of International Paper businesses are expected to meet specific performance objectives, including progress towards achieving an average 12% return on investment over a business cycle, having market leadership within their industry and developing technological leadership," said Dillon in a news release. "This improvement program underscores the sense of urgency required for us to meet these commitments to shareowners and customers," he added.
SALES AND EARNINGS
2Q earnings show improvement
Second-quarter earnings for pulp and paper companies improved from the first quarter and the general consensus is that profits will continue improving during the second half of the year as prices for many grades head upward. While most commodity paper producers reported weaker results from a year ago, some companies showed strong increases, particularly for tissue papers. Also, diversified earnings from wood products were up sharply and overhead costs were down for many companies.
"We're at the end of the tough period," said Mark Diverio at UBS Securities in New York. Prices are beginning to rise and market conditions are fundamentally better than they have been for some time, said Diverio. He expects "a more traditional price recovery" over the next year than the price surge that took place in 1994 and 1995, which proved to be unsustainable.
A Pulp & Paper Week survey of 31 paper and forest products companies shows second-quarter profits fell 36% from a year ago. Net earnings from operations were $737 million compared with $1.14 billion in 1996. In the first quarter of this year, net earnings were $618 million, down 58% from the same period in 1996.
Looking ahead to the third quarter, Wall Street analysts expect earnings to improve more substantially from the second quarter as industry pricing strengthens. The third quarter "should represent the last 'down' year-over-year comparison," commented Chip Dillon at Salomon Brothers Inc. "By the fourth quarter, both quarterly and yearly comparisons should be favorable," said Dillon.
PRINTING/WRITING PAPERS
Simpson to sell mills, exits printing/writing
In a decision that effectively takes it out of the printing/writing paper business, Simpson Paper Co. said it will sell its coated and specialty paper unit. The Seattle-based company is seeking buyers for its pulp and paper mills in Pasadena, Texas; Anderson, Calif.; and Gilman, Vt.; plus a finishing facility in Burlington, Iowa.
The move affects about 1,500 employees and would leave Simpson with kraft paper and linerboard manufacture at its Tacoma, Wash., mill. The company said it would also retain 775,000 acres of timberland and its wood processing facilities in California, Oregon, and Washington. The Cellulosa del Pacific market pulp joint venture in Mininco, Chile, will not be impacted.
Chairman Colin Moseley said while the company has "dramatically reduced our overhead costs," the downturn in the paper industry led to the decision. "Although we are seeing some signs of improvement, a recovery has been much slower than forecast, thus making it difficult for us to make further capital investment in our coated and specialty mills," he said in a news release.
* Completion date for Consolidated Papers Inc.'s paper machine rebuild at the Duluth, Minn., mill is February 1998. The $30 million project consists of a new gap former on the machine that makes SC-A grades. It is not expected to increase capacity to any signficant extent, but is designed the enhance quality. Engineering began in October 1996. The general constractor is Oscar J. Boldt Construction Co. and the gap former supplier is Voith Inc. The Duluth mill is part of the Lake Superior Paper Industries subsidiary.
Appleton shuts down PM, cuts 160 jobs
Appleton Papers Inc. said it is permanently shutting down part of its Newton Falls, N.Y., coated free-sheet paper mill. The company will stop production on No. 1 machine, a 100 in. trim Black Clawson fourdrinier and will also shut down some finishing equipment at the mill, resulting in a permanent loss of 160 jobs. The mill's other two paper machines, off-machine coater, and two supercalenders will remain in operation. The mill currently employs 460.
Commenting on the need to eliminate jobs, Appleton Papers' CEO Richard Curwen said, the decision to make these changes was difficult because of the impact on employees' lives. The employees at the Newton Falls mill are a dedicated, hardworking group and the jobs that are being eliminated are in no way a reflection on the individuals affected by these changes or their work for Appleton Papers.
Curwen said the announced changes will have no impact on the company's coated free-sheet customers. The production capacity reduction of 15,000 tpy at the Newton Falls mill will be absorbed by the company's new coated free-sheet facility at its Combined Locks, Wis., mill. These changes allow for the optimum focus of products at both the Newton Falls and Combined Locks mills. Curwen added that the changes will improve the company's competitive position and accelerate progress in expanding its coated free-sheet business.
CONTAINERBOARD
Tenneco may seek to sell board mills
Tenneco Inc. said in July it may seek to sell its four containerboard mills next year if market prices pick up. "At the right time, if we can capture sufficient value, we are considering disposing, in one way or another, of part or all of our paperboard business," Tenneco chairman and CEO Dana Mead told reporters in a conference call.
Mead said the company was specifically looking to sell its mills, but that it would remain in the containerboard/box business. Tenneco owns four mills including a 1,155 tpd kraft linerboard mill in Valdosta, Ga.; an 882 tpd semichemical medium mill in Filer City, Mich.; a 2,270 kraft linerboard mill in Counce, Tenn.; and a 1,327 tpd semichemical medium mill in Tomahawk, Wis.
Tenneco is not currently talking to any potential buyers, Mead said, while noting that current market pricing is unfavorable for a sale.
Mead said paperboard has been "the problem area of our businesses," since the company's December 1996 exit from gas transport and shipbuilding. Tenneco has restructured itself as an auto parts, specialty packaging, and paperboard company. "One of our goals is to bring out as much cyclicality of this company as we can," said Mead. He said the company's auto parts and specialty packaging operations were "setting records" and "moving very well."
* Jamestown Container Corp. said in June it has entered into an agreement to purchase the assets of Willamette Industries Inc.'s Warrensville Heights, Ohio, sheet plant. The acquisition was expected to be complete by the end of July. The companies declined to release any other information.
KRAFT PAPER
IP to shut bleached kraft paper machine
International Paper Co. (IP) said it plans to permanently shut down the No. 2 kraft paper machine at its Moss Point, Miss., paper mill later this year. The 85-year-old machine has become too expensive to maintain and operate, said Bennie Smith, IP's vice president of containerboard and kraft paper. About half of the machine's production will be shifted to newer papermaking equipment at IP's Mobile, Ala., mill, resulting in a net production loss of approximately 18,000 tpy.
Most of the lost production will be in the 33 lb to 40 lb bleached bag grades. The 160 in. wide Moss Point machine produces 36,000 tpy of bleached kraft paper for bags and butcher wrap. Production on the No. 2 machine is expected to cease in October with production shifting to Mobile in the following months.
IP will continue to have a strong presence in the kraft paper market, offering a wide range of kraft papers, converted bags and packaging products to customers throughout the country. It is also a large supplier of kraft paper to independent bag producers. IP's Camden, Ark., mill has 260,000 tpy of unbleached kraft paper capacity, including a 300 tpd recycling plant, and the Mobile mill has about 75,000 tpy of bleached kraft paper capacity. Earlier this month, IP announced a sweeping restructuring and rationalization plan and agreed to sell its multiwall bag business to Southern Bag Corp.
Southern Bag to buy IP's multiwall unit
The paper shipping sack market was roiled by two major announcements in July that will affect several of the top multiwall bag producers in the U.S. Southern Bag Corp. (SBC) said it has signed an agreement in principle to purchase International Paper Co.'s (IP) multiwall bag business and Bemis Co. said it will close two multiwall bag plants as part of a corporate consolidation.
IP is selling the multiwall bag business as part of an overall plan to sell $1 billion in nonstrategic assets. The sale includes multiwall bag plants in Wilmington, Ohio, and Pittsburg, Kans., as well as most of the assets of the Camden, Ark., facility. SBC will continue to operate the IP plants in Ohio and Kansas, but the Arkansas plant will be closed and bag manufacturing equipment will be moved to other SBC plants. Southern Bag operates a multiwall bag plant nearby in Pine Bluff, Ark., making the Camden facility redundant. Some employees at Camden will be given the opportunity to accept positions at other SBC locations, said the company.
Southern Bag, headquartered in Madison, Miss., is a privately held company and is currently the fourth-largest multiwall bag producer in the U.S. It has multiwall bag plants in Arkansas, Georgia, Mississippi, and North Carolina, plus a commercial printing plant in Alabama and flexible packaging operations in Minnesota and North Dakota.
NEWSPRINT
Fletcher buys Australian company
Fletcher Challenge Ltd. of New Zealand has agreed to pay $218.9 million to News Limited (a subsidiary of Rupert Murdoch's News Corp.) for the remaining 50% share of Australian Newsprint Mills (ANM) that Fletcher didn't already own. ANM is the dominant and lone newsprint market producer in Australia and New Zealand, supplying about 60% of Australia's annual demand.
With full ownership of ANM, Fletcher aims at bolstering operations at the three mills: Boyer (Tasmania) and Albury (New South Wales) in Australia, and Kawerau in New Zealand.
Company CEO Hugh Fletcher told Dow Jones that adding a second newsprint machine at Albury (which has newsprint capacity of 215,000 mtpy) was an "option," but was conditional upon converting newsprint capacity at Boyer (which has newsprint capacity of 242,000 mtpy) to lightweight coated papers.
The better place for a new machine in the short term is Brazil, where Fletcher has a 50.3% stake in newsprint producer PISA, said Doyle Paterson Brown forest products analyst David Stanley. He said the company could install the old Gold River, B.C., mill newsprint machine, which Fletcher purchased for $80 million in 1995, at PISA's 160,000 mtpy Jaguariaiva mill.
The Jaguariaiva mill has the space to accommodate a second machine, said Stanley. "It's a window of opportunity," said Stanley. "The dynamics of the Brazilian newsprint market are very favorable. We expect a decision (from Fletcher Challenge) well before the end of the year."
TISSUE
K-C starts South America venture
Kimberly-Clark Worldwide Inc., a subsidiary of Kimberly-Clark Corp. (K-C), this month announced the formation of a joint-venture company in Argentina to manufacture and sell tissue products. The new company, to be called KCK Tissue, represents the first tissue venture in Argentina by both K-C and its partner Celucat SA, a subsidiary of the region's largest integrated forest products manufacturer Industrias Klabin de Papel e Celulose SA. Terms of the agreement were not disclosed by either company.
K-C already has significant diaper, wipes, and femcare operations in the country through K-C Argentina, which became a wholly owned subsidiary last year after the company acquired the remaining 49% share of a joint venture company. "This venture supports our growth strategy of expanding into new markets in Latin America and around the world," said K-C's CEO Wayne Sanders.
CORPORATE STRATEGY
Bowater reorganizes forest divisions
Bowater Inc. will reorganize its U.S. and Canadian forest and wood businesses into one division that will aim to increase financial returns from the company's vast timber holdings, the company said in July. Bowater also will consolidate its newsprint and directory paper units into one division, again aimed at increasing returns.
The Greenville, S.C.-based company owns or controls nearly 3.6 million acres of timberland in six states and Canada, along with three sawmills that can produce about 200 million bd ft/year. Richard K. Hamilton will head the new division after serving as vice president for wood products at the company's Calhoun, Tenn., operation.
BUILDING PRODUCTS
IP to pay damages in siding lawsuit
International Paper Co. (IP) has agreed to pay damages stemming from a class action lawsuit in which its Masonite Corp. subsidiary was found guilty of making defective siding. The lawsuit went to trial last year in state court in Mobile, Ala. and a jury decided that certain outdoor siding manufactured by Masonite was defective and caused damage to homeowners' property. IP agreed to settle the claims before the second phase of the trial to decide damage awards starts later this year.
Estimates of the number of potential claims from homeowners who installed Masonite hardboard siding since Jan. 1, 1980, ranged from several hundred thousand to more than 3 million. Plaintiff attorneys estimated the average cost of repair would be $10,000 for each home.
Under the proposed settlement, IP agreed to pay plaintiff attorney fees totaling $47.5 million and damages on an individual basis following inspection of each plaintiff's property by an independent claims administrator. The settlement could run as high as $197.5 million, but some claims may be covered by insurance, said an IP spokesman.
ENVIRONMENT
Timber victorious on logging issue
In other congressional action in July, the timber industry was handed a modest victory when the House rejected a measure to cut funds for new logging roads, approving a bill by a vote of 211-209 that only modestly reduces government spending for such roads in national forests. The debated proposals were part of a $13 billion spending bill for the Dept. of the Interior, which passed the House July 10, but awaits Senate action.
Critics of road building in national forests were seeking to eliminate $41.5 million from the budget for the federal forest road building program, thereby cutting taxpayer funding of most new logging road construction, although upkeep on existing roads would have continued. The compromise bill cuts only $5.6 million.
FIBER
Lenzing wins lyocell patent judgment
Austria-based Lenzing AG has won a round in a long-running patent dispute with U.K.-based Courtaulds plc regarding a step in the process of manufacturing lyocell fiber. Reversing an earlier decision in favor of Courtaulds, a federal appeals court in Washington D.C., reinstated the patent and sent the case back to a New York district court for trial on a four-year-old infringement suit against Courtaulds. Lenzing had charged Courtaulds with infringing the patent at its lyocell plant in Mobile, Ala.-a charge Courtaulds denied while alleging the patent was invalid. Lyocell is spun from a solution of cellulose in an organic solvent and water; Lenzing said the patent relates to the preparation of the spinning solution, describing it as "a key step" in the production of the fiber. Both companies have filed a number of patent applications in connection with their lyocell technologies. However, Courtaulds said it is at an "advanced" stage of negotiating cross-licensing agreements "which would allow both parties to develop the product to the maximum potential." Last year, satisfying neither company, the European Patent Office said a particular lyocell process could not be patented.
* The margarine and pulp and paper-related worlds have taken a geographic leap in the evolution of their unlikely alliance. McNeil Consumer Products Co. acquired from Finland's Raisio Group the U.S. distribution license of its cholesterol-reducing foodstuffs-foodstuffs that use byproducts of pulp (and vegetable oil) production. Pine pulp's tall oil is used to produce sterol, which is used to produce stanol ester, which is used to produce Benecol, Raisio's fast-selling cholesterol-blocking margarine. McNeil is a subsidiary of Johnson & Johnson, better known in the pulp and paper industry as a converter for nonwovens and absorbent products.
INTERNATIONAL
Sumatra expansion plans questioned
Indonesia's Ministry of Forestry has told Sumatra's timber companies, including pulp producers, to stop increasing their capacity because of a shortage of woodpulp, according to a recent article in the Jakarta Post. "Too much freedom to expand for the timber industry would prompt illegal logging and accelerate the pace of deforestation," Djamaludin Suryohadikusmo, the forestry minister, was quoted as saying. The article said some wood used in pulping is bought from the public "who illegally cut it from protected natural forest." The clampdown is reportedly supported by the production and distribution ministry and the trade and industry ministry. Djamaludin said the government would issue a new rule to replace a regulation that now allows expansions up to 30% without a license, the publication said, noting that pulpwood plantations were begun in 1989, but that none are yet ready for harvest. Morgan Stanley said one potential regulatory change could require that all future timber-related expansions be initially wood self-sufficient, matching annual consumption capacity with current annual yield from the concession; licenses in the past had been granted on much more productive anticipated future plantation yields.
There have been rumblings for some time about woodpulp sourcing problems-from inadequate supply to transportation challenges. A producer source elsewhere in Indonesia noted that while there have been previous direct statements about woodpulp supply issues, this is the first time three separate agencies are expressing support. Several U.S. analysts pointed out that at least in some cases, the financing of some expansion plans in Indonesia is as big a hurdle as is woodpulp sourcing.
WOOD PRODUCTS
Consolidation and shutdowns in B.C.
TimberWest Forest Ltd. and Doman Industries Ltd. in July said they will acquire Avenor Inc.'s Pacific Forest Products Ltd. in a C$573 million acquisition of British Columbia private timberlands and sawmill operations. Meanwhile, lumber outages were reported widespread in B.C. including a TimberWest plant affected by the pulp and paper strike against Fletcher Challenge Canada Ltd.
The sale agreement provides for the acquisition by TimberWest of all of the shares of Pacific, including Avenor's 53%, and for Doman to concurrently purchase Pacific's three sawmills and Crown woodland operations for approximately C$144 million. The proceeds will be available to Pacific's new owner, TimberWest, which will hold onto Pacific's private timberlands consisting of about 125,000 ha (308,000 acres) primarily on Vancouver Island. Doman will also own provincial timber-cutting rights of approximately 1.7 million m3 and will further receive a commitment of sawlogs annually from TimberWest. The agreement in principle provides that there will be continuity of fiber flows from Pacific's current properties to Avenor's nearby Gold River pulp mill.
Avenor planned a selloff of Pacific following its unsuccessful effort to acquire Repap Enterprises Inc.
COATED PAPERS
Repap to sell U.S. coated unit, Manitoba
Consolidated Papers Inc., North America's largest coated paper producer, will acquire Repap Enterprises Inc.'s Kimberly, Wis., mill for $227 million in cash and assumption of $433 million of debt. Repap's kraft paper and lumber operation in The Pas, Man., will be sold to Tolko Industries Ltd., a privately owned Canadian company; the coated paper mill in Newcastle, N.B., will be kept as Repap's one remaining major asset.
The Montreal, Que.-based company made the announcement July 9, three months after a failed merger with Avenor Inc. George Petty, Repap's chairman and chief executive, said the asset sales will enable the company to pay off $196.5 million in senior debt and provide added liquidity. Analysts estimated the asset sales will leave Repap with about $C1 billion ($728 million) of its C$2.4 billion debt. The three facilities posted an operating loss of C$496 million in 1996, compared with a profit of C$140 million in 1995.
Consolidated had been rumored as a likely buyer of the U.S. operations as it is based within 100 miles of the Repap mill. Tolko Industries, a Vernon, B.C., lumber and oriented strand board (OSB) producer, was a surprise buyer of The Pas. No purchase price was disclosed, but one estimate put it in the range of C$130-$150 million.
Repap said it expects to receive net proceeds of C$47 million ($34.2 million) from the sale.
BOXBOARD
Mead completes coated board expansion
Mead Corp. said it has completed a $50 million rebuild of the No. 1 paper machine at its Mahrt coated board mill in Phenix City, Ala., raising capacity on the machine by 35,000 tpy. This project, combined with the 1996 rebuild of No. 2 machine, adds 75,000 tons of new capacity and increases the mill's potential production of coated natural kraft (CNK) paperboard to 935,000 tons.
Management believes that the mill could see additional tonnage in 1998-on the order of as much as 950,000 tons. Over the following years, further debottlenecking and incremental capacity gains could push total production to one million tons.
The No. 1 machine rebuild included extensive upgrades to the stock preparation area, the forming systems, the press section and the machine drives. The unit is a Beloit Bel-Bond twin wire fourdrinier machine with a wire width of 280 in.
The forming system upgrade included an extension of the fourdrinier table and the addition of a top sheet former. The press section was replaced with two double felted presses, including an extended nip press.
DEINKED PULP
Ponderosa takes over project amid dispute
Ponderosa Fibres of Pennsylvania Inc. has assumed operating control of its troubled greenfield market deinked pulp mill in Northampton, Pa. In the latest chapter of the mill's short history, turnkey contractor Parsons Main Inc. walked off the project, according to a Ponderosa source. "They said they were mechanically complete. We don't agree," he said, adding that there were philosophical differences and that lawsuits are expected.
The $192 million 415 tpd a.d. (150,000 tpy) mill, which started up late last year, has managed to produce only tissue-grade pulp. It had problems with the rebuild of the sandfloat clarifier, a device for eliminating micro stickies and micro poly. The source said that Ponderosa believes that with its experience, it can do a better job than Parsons Main of running the mill and determining all of the problems. He said in mid-July that it should be producing commercially acceptable pulp "in the next 60 days or so."
Ponderosa said in an announcement that it took control effective July 2. In July, the company began interviewing professional engineering firms to finish the work. Ponderosa would not comment on reports that another $30 million may be required, but said that it might take as much as six months to fix all of the problems. Denying Ponderosa's allegations, a Parsons Main spokesperson said that the company feels it has complied with its contractual obligations on the project and that it stands behind its work.
ENERGY
Fraser Papers dedicates cogen power plant
A new cogeneration power plant was dedicated by Fraser Papers at its Edmundston, New Brunswick paperboard mill.
The C$135 million facility is fueled by biomass (bark and sawmill waste), consuming 100 tons of biomass per hour to produce 550,000 lbs of high pressure steam per hour. The steam drives a turbine capable of producing up to 45 megawatts (MW) of electrical power, of which 38.5 MW is sold to the New Brunswick Electric Power Commission. The Fraser cogen plant will consume 75% of the 1.2 million tons of waste wood generated annually within 75 miles of Edmundston.
"Our plant uses sawmill wastes that previously required landfilling or teepee burning which represented an environmental burden and significant disposal cost," noted John Wasserlein, President and CEO. "Cogeneration converts this cost into income and improves the profitability of sawmills in the region. Moreover, it creates value from waste in the form of steam and electricity while protecting environmental quality."
The plant supplies process steam for the Edmundston operations. The new facility replaces two aging oil-fired boilers and allows a third oil-fired boiler to be on stand-by status. Fraser will no longer purchase C$10 million annually in oil.
The plant was completed more than three months early and reduces solid waste landfill deposits in the area by 33%. Additionally, its design and environmental controls are helping Fraser to reduce sulfur dioxide emissions by 56%.
PAPER STATES
Arkansas forest management leads to sustainability and expansion
Sawmilling began on a large scale in Arkansas in the 1890s, when mill cuts of more than 50,000 bd ft/day were common. By the 1920s, professions close to forestry fields knew better forest management was necessary for sustained yields in the years to come. In the 1930s, the Crossett Lumber Company made an agreement with the Forest Service whereby the government would acquire 1,680 acres of second-growth timberland if an Experimental Forest and Research Center could be set up and, in 20 years, return a volume of timber equal to the volume on the land at the time of the agreement. Not only did the program succeed, but, along with Professor H. H. Chapman at the Yale University summer camp of forestry, it pioneered such novel concepts as determining growth possibilities, estimating how much abandoned farmland could be used to plant new trees, and determining when sawmills idle.
Today, nine paper and allied companies have locations in Arkansas. The companies include industry powerhouses such as Georgia-Pacific Corp., International Paper Co., Potlatch Corp., Gaylord Container Corp., Willamette Industries Inc., and Weyerhaeuser Co. Seven paper and paperboard mills produced over 3 million tons in 1996, while woodpulp mills generated nearly 2.8 million tons. And structural panelboard converters turned out almost 2 billion ft2.
Converters and secondary suppliers cluster closely around the major pulp and paper producers. Combining the large corporations with smaller distributors and converters, more than 40,000 people were employed in the forest products sector in 1996, including over 10,000 in the pulp and paper industry. According to a Crossett, Ark., Development Agency official "the town wouldn't be here if it weren't for the forestry business." Maybe that's because one in every six manufacturing jobs in Arkansas is involved in the production of forest products.
As the state's second largest manufacturing industry, paper and wood products ranked second in terms of employment-behind food and kindred products-but in terms of payroll, it ranks number one.The forest products sector brought home paychecks of over $1 billion in 1996, according to the Arkansas Forestry Commission, and the entire forestry community contributes more than $1.4 billion to the economy of Arkansas.
With so much already invested in the economy, the forest industry in Arkansas is taking root in maintaining methods of managed growth and sustainable yield for its forests, which are 58% hardwoods, 24% softwoods-chiefly loblolly and shortleaf pine-the remaining 18% being mixed. Today, forests occupy 17 million acres, covering over 51% of the state, and Arkansas' timberland acreage has increased 3% since 1978. Land management programs, such as the one offered by the Arkansas Timber Producers, seek a partnership with the approximately 160,000 individuals who own 57% of the forestland. An additional 25% of the forests belongs to forest resource companies, with the remaining 18% being owned by the government.
According to Larry Boccarossa, Arkansas Timber Producers, forestry professions increasingly work directly with private landowners to plant in excess of 79 million seedlings each year. "We're willing and anxious to assist any timberland owner who is interested in working toward sustainable yield production," said Boccarossa.
It is estimated that about $250 million of capital expenditures on recycling, productivity, quality and capacity improvements was spent in 1996. However, that is only a drop in the bucket compared with the most recent expansions of some of the state's largest producers. Since 1962, when G-P combined its tradition of concentrating on the marketing of finished goods, with the acquisition of the Crossett Co.'s focus on raw materials and production, the Crossett G-P site has regularly upgraded its facilities into one of the largest integrated forest products plants in the world.
The 1,500-acre Crossett complex includes a plywood plant, stud mill, pulp mill, seven paper machines, paper converting facilities for tissue products, as well as chemical plants to supply the processes. Altogether, it produces 590,000 tpy of uncoated free-sheet, tissue, paperboard, and bleached hardwood and softwood pulp, according to Matthew P. Van Vleet, manager of corporate communications. In 1990, G-P acquired its mill in Ashdown, Ark. from Great Northern Nekoosa. Following a $575 million expansion at Ashdown in 1991 and two tissue machine rebuilds at Crossett in 1996, G-P is in the midst of a $150 million expansion to install a new 60,000 tpy tissue machine at Crossett, scheduled to start up in late 1998.
Weyerhaeuser is currently studying the construction of a $750 million greenfield containerboard mill to be built in either Fulton, Ark., or Valliant, Okla., according to Pulp & Paper Project Report. The 650,000 tpy mill would represent a substantial and aggressive move into an established market. Weyerhaeuser owns 1.3 million acres in Arkansas.
Arkansas timberlands have been involved in recent major acquisitions including a swap of 180,000 acres, mostly in Oklahoma, owned by Weyerhaeuser for 48,000 acres owned by the Ouachita National Forest and the sale last year by Riverwood International Corp. of 538,000 acres, mostly in Louisiana, to Plum Creek Timber Co. for $540 million or $950/acre.
By David Drobesh
This is the twelfth of a series on the significance of the pulp and paper industry to states and provinces in the U.S. and Canada. A focus on Mississippi appeared in September 1996.
|
