Orchids Paper Products Company plans to invest $30.4 million to upgrade its paper making and converting assets in Pryor, Oklahoma. The paper mill project will replace two existing paper machines and start-up in approximately 20 months. The new paper machine will be supplied by Recard, S.p.A.

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Orchids Paper to invest $30.4 million to upgrade paper making and converting assets in Oklahoma mill

Nov 25, 2013. /Lesprom Network/. Orchids Paper Products Company plans to invest $30.4 million to upgrade its paper making and converting assets in Pryor, Oklahoma, as the company said in the press release received by Lesprom Network.

The paper mill project will replace two existing paper machines and start-up in approximately 20 months. The new paper machine will be supplied by Recard, S.p.A.

The new paper machine will be capable of producing a broader range of paper grades that are utilized in value and premium tier products. It will replace two paper machines that produce paper utilized only in value tier products. This provides greater flexibility to the operation and allows for maximizing production output across all paper machines.

The project is expected to increase the annual capacity of Orchids' paper mill from 57,000 tons to over 70,000 tons. Completion of the project will provide Orchids with sufficient paper to produce approximately 11 million cases of converted products annually. The new machine offers higher production rates and improved energy efficiency, thereby resulting in significantly lower production costs than the two machines being replaced.

The combination of lower production costs and increased capacity is expected to increase annual EBITDA by approximately $6 million to $8 million once the project is complete.

The converting line project is an upgrade to an existing asset and will improve manufacturing flexibility and capacity with a lower cost structure. This project is expected to be completed by the end of 2014 and to generate an additional annual EBITDA of $2.8 million to 3.4 million when fully utilized.

Jeff Schoen, the Company's President and CEO, said, "Orchids is implementing an "upgrade and debottleneck" strategy that improves our manufacturing flexibility, capacity, and cost structure. These projects increase our ability to produce higher quality grades of value and premium products supporting our vision of being recognized as a 100% retailer-focused, national supplier of high quality consumer tissue products in the value, premium, and ultra-premium product categories."

Orchids Paper Products Company is an integrated manufacturer of tissue paper products serving the at home private label consumer market.