County leaders on sidelines for IP deal
Published 12:00 am Tuesday, July 11, 2000
County and economic development leaders say they are watching from the sidelines as International Paper tries to sell its Natchez mill.
&uot;I have talked with Mr. (Steve) Olsen and endorsed all the help we could give him,&uot; said Virginia Salmon, president of the Adams County Board of Supervisors, adding that the Natchez mill manager thanked her for the offer.
&uot;But they’re in a better marketing position then we are,&uot; Salmon said. &uot;And they know their business better than we do.&uot;
International Paper announced last week it plans to sell its chemical cellulose business, the bulk of which takes place at its 750-employee Natchez mill.
Because the chemical cellulose business is highly specialized, the market of potential buyers for International Paper’s Natchez mill is limited – primarily to the mill’s current competitors.
&uot;We’ve told them we’d help in any way we could,&uot; said Andrew Ketchings, assistant director of the Natchez-Adams County Economic Development Authority. &uot;Whoever starts looking will need information on Natchez and Adams County, and we can provide that.&uot;
The information likely will be generalized, he said. &uot;I understand IP pretty much handles everything else.&uot;
And although some sort of tax incentive package likely will be offered to any potential purchaser of the mill, neither Salmon nor Ketchings could give specifics.
&uot;We usually give (an ad valorem) tax break for the first 10 years,&uot; Salmon said, explaining that the formula for calculating that incentive would come from the tax assessor.
Also, any tax incentives would have to be approved by the board.
Ketchings said while the EDA&160;wants to compile a &uot;basic package&uot;&160;of city and county tax incentives and other business incentives to use in recruiting, such a list has not been compiled.
&uot;That’s something we’ve mentioned,&uot; he said, adding that he and EDA&160;board members plan to revive the discussion with city and county officials.
Industry analysts said last week the plan to sell the Natchez mill was not a surprise given IP’s announced plan to compensate for the $2.3 billion in debt in incurred in a merger with Champion International.
&uot;One of the obvious things they were going to sell was the chemical business,&uot; said Lise Shonfield, an analyst with ABN&160;AMRO Inc.
Analysts said specualtion 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 African. 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 large amount of capital to buy the Natchez mill.
IP’s chemical cellulose business produces about 250,000 tons of dissolving pulp per year. The pulp is used in such products a sphoto film, rayon, cellophane, ethers and acetate yarns.