IP mill officials: Closings won’t affect Natchez

Published 12:00 am Thursday, October 19, 2000

As Miss-Lou residents face the future sale of International Paper’s Natchez mill, other IP sites are facing layoffs. International Paper is closing three mills and scaling back the size of a fourth mill in Courtland, Ala., company officials announced Wednesday.

The Natchez mill will not be affected, but mills will be shut down in Mobile, Ala., Lock Haven, Pa., and Camden, Ark.

The cuts equal about 2,500 jobs — or 2 percent of the company’s worldwide workforce of 117,000 — with about half of those losses taking place in Mobile.

Email newsletter signup

The workforce at Courtland will be cut to about 1,300. Lock Haven employees 600 people and Camden employees 580.

John Dillon, company chairman and chief executive officer, said the decision was not easy.

&uot;Terrific hard working people are hurt at times like this,&uot; Dillon said. &uot;But we can not continue to operate business as usual if we are to win in the tough, global business environment in which we operate today.&uot;

The mill closings will reduce production by 1.2 million tons annually in IP’s uncoated paper, market pulp, unbleached Kraft paper and containerboard business.

International Paper bought Courtland this year when it bought Champion International.

The company will shut down a fiber line and related paper machine and pulp dryer at Courtland but four other paper machines will continue to operate.

None of the products made at the impacted mills are made at the Natchez mill, the only International Paper mill to make a product used in chemical processes called cellulose.

The company is making these closures &uot;to realign production more efficiently and reduce our higher-cost operations,&uot; Dillon said. &uot;Couple this with our on-going divestiture activities and the result will be a stronger, more focused, more profitable IP.&uot;

One of the company’s &uot;divestiture&uot; activities includes a summer announcement to streamline non-core businesses by putting the Natchez mill up for sale. It employs about 750 people.

&uot;Nothing has changed for us as result of this news,&uot; said Natchez mill spokeswoman Lillie DeShields. &uot;We will be talking to a number of prospective buyers between now and the end of the year, and we are excited about the prospects.&uot;

Barney Sterling, president of PACE, one of seven union locals at the Natchez mill, said he has been told seven companies had expressed interest in buying the mill.

He heard about the closures at other sites Wednesday and did not know much about them.

Sterling, who said he knew some of IP’s Mobile employees, did not think the closures would impact Natchez because of the differences in products.

&uot;It’s going to be bad (on those locations) but that’s really, all I know,&uot; he said.

International Paper also reported Wednesday a 15 percent increase over third-quarter 1999 earnings. The mill earned $260 million, 53 cents per share in 2000, as compared to $193 million or 46 cents per share in 1999.

Third-quarter 2000 net sales were $7.8 billion, up from $6.3 billion in 1999.

Linda Lieberman, a financial analyst with Bear Stearns, said she was only surprised with the magnitude of the closures. &uot;IP has tried everything not to do (this),&uot; said Lieberman, who said the decision is a move in the right direction. &uot;This is the right move for them to make given where they are right now.&uot;

Closures have been discussed and rumored for some time, she added.

Returns below the industry average and Tuesday’s stock trading at a seven-year low are part of a &uot;desperate call as IP gets bigger and bigger for more action,&uot; she said.

Wednesday’s announcement sent IP stock up 1-3/16 in the New York Stock Exchange that morning.

The Associated Press contributed to this report.