IP still negotiating sale of Chapman plant

Published 12:00 am Monday, July 3, 2006

International Paper continues negotiations for the sale of its wood products division of which the mill in Chapman is a part of, company officials said Wednesday.

The proposed sale is part of the company's plan to transform its operations to focus on uncoated paper and packaging.

Part of the restructuring already completed includes the sale of approximately 5.1 million acres of forestland for $6 billion and the company's recent sale of its coated papers division for $1.4 billion.

Email newsletter signup

The proposed sale of the wood products division, the no. 2 producer of softwood lumber in North America, was announced in July 2005.

&#8220International Paper is continuing to evaluate options for the wood products business, including possible sale,” said Kristy Brown, Human Resources Manager at the Chapman Mill. &#8220We have distributed sales books to prospective buyers, and the process of evaluating bids is ongoing. Our Wood Products business is an excellent business, with well-performing operations, and we feel that the level of interest we've had is a good reflection of that. We expect that a decision (on the sale) could be made by the end of September.”

Brown said she understands there are many questions about the proposed sale and what it might mean to the area.

&#8220We are aware of a number of questions in the community about the future of our Chapman mill,” she said. &#8220International Paper is a large employer here, and the outcome of IP's evaluation of its wood products business is important not only to our employees, but to many others in the region.”

Ricky McLaney, the top economic developer for Butler County, agreed there are naturally a lot of &#8220question marks” regarding the potential sale, but feels the Chapman mill would be an excellent asset to any company's portfolio.

&#8220The good thing is that we sit in the ‘wood basket' where there is a good source of timber within 75 miles of us, where if you move to the east it's not as prevalent,” he said. &#8220There's also a long history with Union Camp and W.T. Smith Lumber of producing out of that Chapman site. There's probably third generations working there who have been with those three companies. That's a workforce that you can't ignore and one that knows how to run that facility. Those things have to work to their advantage.”

He also said a potential buyer would have to look at the possibility of making capital improvements to the plant.

&#8220Whoever buys it will need to make some immediate investment in it, especially in the plywood plant,” he said. &#8220It's been tough for them to compete with folks who have more modern facilities.”

Brown said she cannot reveal who potential buyers are, or how many interested parties there are, but it has been business as usual at the mill and that things will continue to operate as normal as details of the proposed sale are completed.

&#8220For confidentiality and regulatory reasons, we're limited in what

information we can provide during this process or during discussions

with any potential buyers,” she said. &#8220However, when a decision is made and new information is available, we will first let our employees know and then notify members of the community and the media. Until that time, we're continuing to operate the business. The most important thing for employees at Chapman right now is to continue to work safely and operate the mill well.”

The Chapman mill employs 350 full time employees and was established in the early 1900s as a lumber mill. The Chapman mill produces approximately 57 million board feet of lumber and 180 million three-eighths square feet of plywood annually. International Paper has owned the Chapman mill since 1999 when its operations merged with Union Camp in an $8 billion deal.