International Paper signs deal to sell PB mill to overseas firm for approximately $500 million

Jan 10, 2007. /Lesprom Network/. International Paper Co. said on January 2 that it has signed an agreement to sell its beverage-packaging business - including its Pine Bluff pulp and paper mill - to Auckland, New Zealand-based Carter Holt Harvey Ltd. for approximately $500 million, according to Arkansas Democrat-Gazette. The transaction, which was first announced in mid-October, is expected to close in the first quarter of 2007, subject to regulatory approvals. The Pine Bluff mill has an annual payroll of approximately $60 million, spokesman Jim Davis said. International Paper’s beverage-packaging business employs approximately 3 000 employees - including 1 060 in Pine Bluff - and annually produces more than 680 000 tonnes of packaging for juice, dairy and other products. The business had net sales of approximately $860 million in 2005. Selling the unit “will allow a very profitable business to continue growing,” International Paper said. The Pine Bluff mill, which began operation in 1958, has two paper machines: one that produces a significant portion of the world’s liquid packaging board for beverage cartons, and one that produces coated papers for magazines. “That coated machine is going to stay with the beverage-packaging business,” company spokesman Amy Sawyer said. “They’ve put an organization in place within the business to continue to produce and market those papers.” Carter Holt Harvey, a leading forest-products company in New Zealand and Australia, now has no facilities in North America. International Paper also announced Tuesday the signing of an agreement to sell its Arizona Chemical business, based in Jacksonville, Florida, to Rhone Capital III LP for approximately $485 million. “These agreements bring us close to completing the divestitures planned as part of our transformation, and I’m extremely pleased with the progress we’ve made in 2006 to become a more focused, more profitable company,” Mr. Faraci said in a statement. Both sales are part of International Paper’s transformation plan, which was announced in July 2005, to reduce debt and focus on two key businesses: uncoated papers and industrial and consumer packaging. Proceeds from all such divestitures announced to date, including the dealings announced Tuesday, total about $11 billion, the company said. In Arkansas, International Paper previously announced the sale of approximately 540 000 acres of timberland, a kraftpaper facility in Fordyce and a lumber mill in Leola. Remaining for disposition are a plywood mill and lumber mill in Gurdon and a tree nursery in Bluff City. International Paper plans to retain its corrugated-container plants in Conway, Jonesboro and Russellville. In addition to the Pine Bluff paper mill, International Paper’s beverage-packaging business includes plants that produce cartons in Massachusetts, Michigan, North Carolina, Florida, California, Ontario and Quebec; a packaging manufacturing facility in Iowa; wholly owned subsidiaries in China, South Korea and Taiwan; and joint ventures in Latin America, Israel and Saudi Arabia.