IP’s impact wide-ranging, leaders say

Published 12:00 am Sunday, July 9, 2000

From its 750 employees to the grocery stores at which they shop, changes at International Paper’s Natchez mill will reach throughout the community, local leaders said. Last week’s announcement that the company wants to sell its chemical cellulose business — nearly all of which happens at the Natchez mill — has had many people wondering what the future holds for the 50-year-old mill, Adams County’s largest employer.

Wirt Peterson of Southwest Mississippi Planning and Development said the impact extends beyond those directly affected by the mill.

&uot;Every dollar turns over about seven times, and if you use that multiplier it would be a tremendous loss to the entire community&uot; if the mill closes, Peterson said. &uot;Not only for the people working there but for the grocery stores, the people who sell houses and the people who sell timber and raw materials to the mill.&uot;

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The Natchez mill employs 750 people and has an annual payroll of $31 million. It has another 100 contracted employees.

The company’s efforts to increase the mill’s profitability have made headlines in the past year, with the company’s scrapping a $100 million boiler project last summer and making a 94-employee layoff in July 1999. Those employees were hired back this spring.

Still, the news has often sparked rumors and uncertainty about the mill.

&uot;My first reaction was I was somewhat upset,&uot; Adams County Supervisor Darryl Grennell said of the announcement.

But after talking with company officials, Grennell said he is reassured the likely scenario is workers won’t lose their jobs if another company comes to buy the mill.

IP is not the only paper company in the chemical cellulose business. Companies mentioned as possible buyers include U.S. firms such as Buckeye and Rayonier and a South African company, Sappi Inc.

But if the worst happens and a company does not buy the mill, forcing it to close, the impact would be &uot;devastating,&uot; said Peterson.

&uot;It would have a huge negative impact&uot; if the mill were to close, said Peterson, who pointed out that the mill’s impact reaches all of southwest Mississippi and across the river to Louisiana.

&uot;There’s a world of people in Concordia Parish who work at International Paper,&uot; said Ferriday Mayor Glen McGlothin. &uot;I&160;hope this won’t result in layoffs. A lot of checks from IP come into this community and benefit the economy.&uot;

&uot;A lot of people have been worried about the rumors,&uot; said Buddy Spillers, president of Ferriday-based Macon Ridge Economic Development Authority.

&uot;A whole lot of people live over here but work over there,&uot; Spillers said.

But because the company has said it wants to sell the mill as &uot;an ongoing entity,&uot; many officials said they believe the most likely possibility is another company will buy the mill and keep it open.

And that, said Adams County Supervisor Virginia Salmon said, could have quite a different impact.

&uot;We may be needing to talk about expansion&uot; if another company comes in and buys the mill, Salmon said.

&uot;If it’s sold and stays open … they wouldn’t be changing their labor force out,&uot; Spillers said. &uot;They would be keeping the skilled labor they have there now.&uot;

Tax contributions

If another company did expand the mill, the tax revenue would certainly benefit the local economy.

Like all companies, IP’s Natchez mill contributes ad valorem taxes to the budgets of the county, city and school district.

According to Adams County Tax Assessor Reynolds Atkins, the county collected a total of $7,887,497 in ad valorem taxes in fiscal year 1999, and the school district collected $8,046,188 — a total of $15.9 million. Atkins did not have figures available for city collections.

That same year, Atkins said, IP’s tax bill to the county and school district — made up mostly of property taxes on land and equipment — was $2.9 million.

That’s about 18 percent of the total tax collections for the county and school district.

By contrast, some of the county’s other large employers paid much lower tax bills. Lady Luck paid $309,945, for example, and Wal-Mart paid $291,607.

Grennell said he’s well aware of the financial impact the mill has made on the county. &uot;I just pray that it will not have a bad impact,&uot; he said of the possible changes.

Property tax revenue isn’t the only economic impact the mill has.

IP contributes to the local economy as well, spending with local vendors. In 1998, the latest figures available from the company, IP’s Natchez mill spent $34.48 million with 161 local vendors.

&uot;When you look at the statistics, at how many millions they have spent with local vendors, the thought of losing those dollars would be catastrophic,&uot; said Stephanie Hutchins, chairman of the Natchez-Adams County Chamber of Commerce. But, she said, &uot;You have to go on with business as usual.&uot;

The corporate citizen

IP’s contributions extend beyond its legal and commercial obligations — from volunteers in schools to United Way contributions to pints of blood for local hospitals.

So talk of a possible mill sale had United Way of the Greater Miss-Lou President Monica Lynch worried on Friday.

&uot;I’ve been sweating all day about it,&uot; she said nervously that afternoon. &uot;From a corporation donation standpoint, IP contributes 60 cents on every dollar from employees. And IP provides the bulk of the sponsorship for our golf scramble …

&uot;Those two things are enough,&uot; she added, &uot;but when you think about the employees who give each year … who are going to be concerned about their jobs this year and not as concerned about the United Way …&uot;

Well, it’s enough to make Lynch more than a little worried. It’s understandable. International Paper’s Natchez mill accounted for 24 percent of the total donations in the 1999-2000 United Way campaign. That includes $45,200 in employee contributions and $27,320 in corporate donations, she said. The United Way provides funding for more than two dozen community service agencies, throughout Adams County and Concordia Parish.

&uot;IP&160;has been a big security blanket,&uot; she said. &uot;If anything, we’d like to see (the sale) go through very fast … (so employees) can get settled and feel secure in their jobs.&uot;

The 750-employee mill has been a security blanket for more than just the United Way, though.

In 1998-1999, according to the company’s figures, IP contributed a total of $364,270 in the form of grants to local organizations, fund-raisers, blood drives, volunteer hours and Adopt-A-School contributions.

&uot;IP has been a wonderful corporate citizen,&uot; Salmon said. &uot;People take that for granted. Maybe this will make us wake up and count our blessings.&uot;

Stacy Graning, Nita McCann and Emily Whitten contributed to this report.