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IP NEGOTIATING SALE OF PB PLANT

By Anita Reding/OF THE COMMERCIAL STAFF
Friday, October 13, 2006 11:23 PM CDT

International Paper has entered into an agreement to sell its Pine Bluff paper mill to an affiliate of Carter Holt Harvey, an IP spokesperson said Friday.

The company is negotiating exclusively with Rank Group Australia, an affiliate of the New Zealand-based Carter Holt Harvey, according to Kathleen Bark with IP.

Local mill managers informed employees on Friday of the company’s plans, according to Jim Davis, communications manager.

“We’ve still got to negotiate the sale agreement,” Bark said, adding that the companies haven’t settled on a price yet.

The sale of the Pine Bluff mill is part of a restructuring plan announced by IP in July 2005.

The company announced plans to focus on two key platform businesses — uncoated papers, and industrial and consumer packaging. And in order to focus on those businesses, the company announced that it would evaluate options, including the possible sale, of several other businesses, including the Pine Bluff mill and other plants that are part of the beverage packaging business.

IP’s beverage packaging includes plants in the United States, Canada, Taiwan, China, South Korea, Dominican Republic, El Salvador, Venezuela, Israel and Saudi Arabia.

Built in 1958 on a 5,200 acre site by IP at a cost of $95 million, the local mill has about 1,100 employees and is one of the largest employers in Jefferson County. Earlier this year, Davis said the plant’s payroll for 2006 will be about $90 million.

The plant produces two types of paper — bleached board which is used for beverage cartons and coated paper which is used for magazines, catalogs and advertising inserts.

The plant produces enough bleached board to make more than one-third of the world’s gable-top beverage cartons and provides all the bleached board for the company’s 16 converting plants around the world.

“We don’t expect this to have any impact on the mill or beverage packaging’s other operations,” Davis said Friday.

Mayor Carl A. Redus Jr. said he is pleased that an organization which is familiar with the wood and paper products industry is planning to purchase the local mill. Carter Holt Harvey has purchased other IP assets, he explained.

“We’re sad to see IP spinning off the beverage packaging business,” the mayor said.

However, the city is looking forward to continuing and improving the relationship with the Pine Bluff mill under the leadership of the new owners, and hopefully the new company will expand the business, he added.

The Associated Press contributed to this report.

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