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Leaf River pulp mill SE Mississippi county

Perry County officials hopeful GP sale won’t mean lost jobs

NEW AUGUSTA — Local government officials are hopeful that Georgia-Pacific (GP) Corporation’s planned sale of Leaf River Pulp Operations will not substantially

affect the mill, which is the largest employer in Perry County.

“It is probably going to change ownership, but I don’t feel it will affect the operations,” said John Anderson, president of the Perry County Board of Supervisors. “This

is one of the best pulp mills in the country. It is definitely a crown jewel.”

Anderson said it would be unlikely that such a valuable asset would be allowed to lie idle. The mill has about 365 employees with an additional 200 employees located

at a GP sawmill next door.

The mill originally was named Leaf River Forest Products and owned by Great Northern Nekoosa (GNN) was one of the largest industrial developments of the 1980s

in Mississippi. The $560-million plant on a 2,200-acre site includes a 15-story high power plant and a pulp mill building 80 feet wide and longer than a football field.

GNN was acquired by GP in 1990.

The sale of the Leaf River Pulp Operations is one of a number of divestitures planned as part of an $11-billion merger agreement by GP to acquire all outstanding

shares of Fort James Corp. Combined revenues of the two companies exceeded $24.8 billion last year. Familiar North American consumer name brands produced by

the two companies include Angel Soft, Sparkle, Coronet, Quilted Northern, Soft ‘N Gentle, Brawny, Mardi Gras, So-Dri, Vanity Fair and Dixie.

GP said the merger is aimed at strengthening its position as a high value-added paper and building products company. The company will be the world’s leading

manufacturer of tissue products when the transaction is completed.

In the past more than half of the Leaf River mill’s annual output of 630,000 tons of bleached market craft pump has been exported. A downturn in exports has

depressed pulp prices. GP plans to transform the company away from commodity products like pulp, and the planned sale of the Leaf River Pulp Mill is part of the

company’s transformation strategy.

“The transformed Georgia-Pacific will be able to focus on those paper and building products businesses that are valued-added and fit our strategic direction,” said

A.D. “Pete” Correll, chairman and chief executive officer of GP. “We will create value by sharpening our focus on higher-margin businesses that are closer to the

customer. Georgia-Pacific’s transformation will improve earnings predictability, strengthen our market position, and drive the increased cash flow needed to take our

long-standing financial strategy to the next level.”

GP spokesman Chuck Jones confirmed that the Leaf River mill is one of several being considered for sale.

“As part of our pending acquisition of Fort James we are prepared to divest approximately 250,000 tons of tissue manufacturing capacity for away-from-home

products and other selected commodity and non-strategic businesses,” Jones said. “We’re currently in what we refer to as the divestiture planning process and

proceeding in discussions with potential buyers. We haven’t made any final decisions about which facilities will be sold.”

The company said it has interested buyers for the Leaf River mill and other GP pulp mills located in Brunswick, Ga., and Woodland, Maine. The potential buyers have

not been identified. GP said that while it is not the company’s policy to speculate about the mill’s future under different ownership, it is presumed the mill will continue

operation without interruption.

Leaf River Pulp Operations has an annual payroll of $26.4 million, and makes local purchases of goods and services estimated at $101 million. GP said the mill has set

numerous production records this year and earned several awards for safety and environmental performance.

Because of a recent drought, the Leaf River at New Augusta is currently below the minimum stream flow levels set by the Mississippi Department of Environmental

Quality (DEQ). The mill has been granted a variance to continue withdrawing water from the Leaf River as long as the following conditions are met:

• After use the plant must return about the same amount of water to the river that was withdrawn.

• Daily monitoring is required upstream and downstream, and monitoring reports must be provided to the DEQ.

• All permit limits must be met.

Jones said no other GP operations in Mississippi are expected to be affected by the merger. GP has plywood plants at Gloster, Louisville and Taylorsville, particle

board manufacturing facilities at Louisville, Oxford and Taylorsville, sawmills at Bay Springs, Columbia, New Augusta and Roxie, a finger joint lumber facility in

Tylertown, resin and formaldehyde operations at Louisville and Taylorsville and a building products distribution center in Jackson.

Contact MBJ staff writer Becky Gillette at mullein@datasync.com or (228) 872-3467.

About Becky Gillette

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