IP putting Natchez mill on the block

Published 12:00 am Friday, July 7, 2000

AP and staff reports

The 750 employees of International Paper’s Natchez mill learned Thursday that the company wants to sell its chemical cellulose operations and their mill.

The announcement came just a few months after the Purchase, N.Y.-based company said it would divest $3 billion of non-core assets by the end of 2001. IP bought Champion Internation in May, a $7 billion deal that forced IP&160;to assume $2.3 billion in debt. IP’s stock closed at 36.75 Thursday.

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&uot;International Paper believes the chemical cellulose business and our Natchez mill will be very attractive to another company where there is a better strategic fit,&uot; Jim Matheson, general manager of the chemical cellulose division, said in a statement. The chemical cellulose division is part of the larger chemicals and petroleum division, which has been losing profits at least since 1997.

The dissolving pulp made in Natchez ends up in photo film, rayon, cellophane, ethers, acetate yarns and other products.

&uot;The best business strategy is for all of us on the chemical cellulose team to continue our focus on exceeding customers’ expectations,&uot; Matheson said.

Richard Schneider, a managing director at PaineWebber in New York, said IP is focusing on its core products, including coated paper, containerboard and bleach board as it seeks to stay profitable in the coming years. The 50-year-old mill in Natchez, he said, is ”not a core business.”

The announcement wasn’t a shock to many people – recent rumors tied to shutdowns and a decision to nix a $100 million boiler have had employees and residents alike curious and concerned about the future of the Natchez mill.

But rumors weren’t enough to stave off uncertainty among many employees, who found out about the possible sale Thursday.

&uot;Of course I’ve got a big knot in my stomach,&uot; said Donnie Verucchi, maintance resource&160;manager for the mill. &uot;I’ve got 32 years with the company, and I’m wondering what the future is going to be.&uot;

Verucchi, who said he has heard a sale of the mill could come in four to 18 months, said both new and longtime employees are nervous about the impending changes.

&uot;People who want a career with IP&160;that are young are anxious,&uot; he said.

And those like Verucchi, who have &uot;a lot of time invested&uot; in the plant, are also concerned about the future, he said.

&uot;We just hope for the best,&uot; said 14-year IP employee Randy Dillon. &uot;We’ll just have to wait and see.&uot;

Natchez mill manager Steve Olsen said in a statement he had spent the day Thursday talking with employees and community leaders about the announcement.

&uot;Understandably, many of the people I’ve talked to today have some anxiety with the announcment because of the uncertainty of who the new owner could be with the possible sale of the business and mill,&uot; Olsen said. &uot;I have reaffirmed with our employees and community leaders that the ChemCell/Natchez mill is very attractive because of our strong market share position, our dedicated workforce, good safety and environmental performance, community involvement and the overall good condition of the facility.&uot;

George Robinson, a president of one of seven local unions at the Natchez mill, is also taking a &uot;wait and see&uot; approach to the announcement.

&uot;We just got to wait it out. (We) can’t get excited about it right now,&uot; Robinson said. &uot;You can’t get excited about something you really can’t do anything about.&uot;

Robinson said the news was not unexpected to him or to the 200-250 employees represented by his union, Local 1699 PACE, one of three paper workers unions at the mill.

&uot;Of course our concern is naturally protection of jobs and the economic impact on this community,&uot; Robinson said.

But Robinson is optimistic a company will buy the mill and workers will keep their jobs because the new owner will need them. &uot;There’s no wasted labor out here,&uot; he said. &uot;It’s operating pretty lean and mean right now.&uot;

And Robinson said he believes the mill is not likely to shut down because its competitors in the dissolving pulp market could not pick up the slack.

&uot;That’s my understanding,&uot; Robinson said. &uot;There’s nobody out there who can pick up that (market) share.&uot;