A day after International Paper announced plans to try to sell its chemical cellulose business — including the Natchez mill — industry analysts weren’t surprised.

Lise Shonfield, an analyst with ABN AMRO Inc., said IP’s months-old merger with Champion International has had analysts wondering how IP could make up the $2.3 billion debt it picked up in the acquisition.

&uot;Everyone’s been trying to speculate&uot; of which assets the company would divest itself, Shonfield said.

&uot;One of the obvious things they were going to sell was the chemical business,&uot; Shonfield said.

The 50-year-old Natchez mill, which employs about 750 people, makes dissolving pulp, which winds up in such products as photo film, rayon, cellophane, ethers and acetate yarns. But it is the company’s only chemical cellulose plant, and IP officials have said they are choosing to focus on other core parts of their business.

The company’s chemical cellulose division is part of the larger chemicals and petroleum division, which been losing profits at least since 1997.

But company officials have emphasized they want to sell the chemical cellulose business as an &uot;ongoing entity.&uot;

&uot;We will explore our options as quickly and efficiently as possible,&uot; said Jim Matheson, general manager of the chemical cellulose division, in a prepared statement. &uot;At this time, we do not know how long this process will take. The best business strategy for all of us on the chemical cellulose team is to continue our focus on exceeding customers’ expectations.&uot;

Industry analysts said Natchez’s mill isn’t the only one likely to go on the block. The company, which has to divest itself of about $3 billion in assets, may be looking at options for several operations.

In June, Bush Boake Allen, a specialty chemical company more than 68 percent owned by IP, announced it is also exploring &uot;strategic alternatives&uot; that could include a sale or merger.

In terms of value to the company, Shonfield said, the chemical cellulose business is not large — 250,000 tons per year is produced.

Speculation about a possible buyer has included U.S. firms such as Buckeye and Rayonier and a South African company, Sappi Inc., which has offices worldwide and a dissolving pulp business just south of Durban, South Africa. That operation has the capacity to produce 600,000 tons of dissolving pulp annually.

&uot;They don’t have the deepest pockets in the world,&uot; Shonfield said of Sappi, but she noted an international company would not necessarily need a lot of capital to buy the Natchez mill.

To determine whether it would be beneficial to buy the Natchez mill, a company would have to examine the mill’s profitability over the past several years to determine the value, Shonfield said.

For the past year, company officials have been working to increase the Natchez mill’s return on investment. The company nixed a $100 million boiler project in its efforts to redouble profitability.

One of the biggest culprits in the mill’s profitability has been soft market conditions for the dissolving pulp the mill produces. The company’s annual report for 1999 blamed the decreasing profitability of the chemicals and petroleum division in part on decreasing demand and lower prices for chemical cellulose pulp.

In fact, Shonfield said the chemical cellulose business is a small piece of the pie for International Paper. That could make a sale to another company more invested in the dissolving pulp business beneficial for the Natchez mill.