SPOKANE, Wash., May 18, 2010 (BUSINESS WIRE) -- Clearwater Paper Corporation (NYSE:CLW) today announced that its
board of directors has approved plans to build a Through-Air-Dried (TAD)
paper machine and seven converting lines capable of producing ultra
grades of private label tissue products. Final site selection for the
Southeastern United States facility is underway.
"After a thorough analysis of the anticipated costs and returns from a
new paper machine, the company is moving forward with construction of a
200-inch TAD tissue machine, together with a total of seven converting
lines," said Gordon Jones, chairman, president and CEO. "Our estimates,
which include strong incentive packages offered by competing states, put
the projected returns for this project at approximately twice our cost
of capital, which we expect to result in long-term value for the
company."
As part of its stated growth strategy, Clearwater Paper is pursuing
investment in its consumer products tissue business, specifically to
expand the company's geographic reach to best serve existing and new
customers on the East Coast. The total cost for the new facility is
expected to be approximately $260 to $280 million, which includes the
two new converting lines previously announced in February 2010. The
total cost figure includes the paper machine, seven converting lines,
buildings to house the paper machine and converting lines and land. The
company expects to fund the project primarily with existing cash on the
balance sheet and future cash flow from operations. It is expected that
capital will be deployed over the next five years, with approximately 80
percent to be split evenly between 2011 and 2012.
"The new facility is expected to employ up to 250 full-time employees
and will increase our ultra quality tissue offering to include TAD
bathroom tissue," said Bob DeVleming, vice president, consumer products
division. "By adding additional TAD technology, we can drive growth in
this segment while effectively competing with ultra quality branded
products in the tissue and towel segments of the market. We believe that
strengthening our product offering will provide us a significant
advantage in the marketplace."
The company intends to break ground during the third quarter of this
year. Build-out and start-up for the converting lines will come in
phases, with the first two lines expected to begin production during the
second half of 2011. The paper machine is expected to take two years to
build from completion of engineering, and we anticipate beginning
production on the machine in the second half of 2012. At full production
capacity the facility will produce approximately 10 million cases or
70,000 tons of bathroom tissue and household towels annually.
ABOUT CLEARWATER PAPER
Clearwater Paper manufactures quality consumer tissue, bleached
paperboard and wood products at six facilities across the country. The
company is a premier supplier of private label tissue to major retail
grocery chains, and also produces bleached paperboard used by
quality-conscious printers and packaging converters. Clearwater Paper's
2,400 employees build shareholder value by developing strong customer
partnerships through quality and service.
FORWARD LOOKING STATEMENT
This press release contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 as
amended, including statements regarding the company's growth strategy
and expansion plans, projected returns on investment, capital costs
associated with the expansion, long-term value, completion of new
operating facilities, production capacity, and customer base. These
forward-looking statements are based on current expectations, estimates,
assumptions and projections that are subject to change, and actual
results may differ materially from the forward-looking statements.
Factors that could cause actual results to differ materially include,
but are not limited to, the company's ability to execute on its
strategies; unanticipated construction and manufacturing disruptions;
customers' product preferences, changes in the United States and
international economies; changes in raw material and energy costs;
cyclical industry conditions; loss of a large customer; competitive
pricing pressure for the company's products; changes in freight costs
and disruptions in transportation services; changes in general and
industry-specific laws and regulations; unforeseen environmental
liabilities or expenditures; labor disruptions; and other risks and
uncertainties described from time to time in the company's public
filings with the Securities and Exchange Commission. The forward-looking
statements are made as of the date of this press release and the company
does not undertake to update any forward-looking statements.
For additional information on Clearwater Paper, please visit our
website at www.clearwaterpaper.com.
SOURCE: Clearwater Paper Corporation
Clearwater Paper Corporation
(News media)
Matt Van Vleet, 509-344-5912
or
(CFO)
Linda Massman, 509-344-5905
or
(Investors)
(IR Sense)
Sean Butson, 509-344-5906
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