International Paper to Keep Pineville Containerboard Mill Operational

June 12, 2007 - International Paper today said that its Pineville, Louisiana containerboard mill will remain operational.

The decision is the outcome of an extensive two-year study of options to strengthen the company's North American containerboard business, IP said.

The company had explored alternatives, including possible closure, for the Pineville mill as part of its transformation plan, announced in 2005. However, the mill has achieved dramatic cost improvement in the past two years, and is now among the most globally cost efficient mills in the system. With global box demand expected to grow at a healthy rate, keeping Pineville as part of the containerboard system will allow the company to further integrate its box businesses in Europe and Asia.

Since announcing its company-wide transformation plan, International Paper has closed two containerboard mills in Groveton, N.H., and Fort Madison, Iowa, and plans to close its 200,000-ton Terre Haute, Ind., mill in the fourth quarter of this year. In addition, the company is converting its mill in Pensacola, Fla., from printing paper to 500,000 tons per year of low-cost, lightweight linerboard production. The project is expected to be completed later this year.

"These changes will increase the company's containerboard capacity in 2007 by approximately 300,000 tons, most of which will be absorbed by the company's internal container business in Europe and Asia," said Dennis Colley, vice president and general manager of International Paper's containerboard business. "These plants have historically purchased their lightweight containerboard on the open market within their own regions. The addition of the Pensacola mill production will allow us to use our containerboard system to supply lightweight board to our box plants all around the globe, while the amount of board sold in North America will remain flat."

"As always, we will continue to match our production to our customers' demands, while continuing to reduce our manufacturing costs to strengthen our competitiveness," Colley added.

The Pineville mill was acquired by International Paper in 1979. The mill today employs approximately 226 people. The mill produces containerboard for corrugated packaging to supply produce, agricultural, poultry and industrial customers.

SOURCE: International Paper

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