German Papermaker Said to Be Buying Kimberly Mill

(UPDATED) Jan. 13, 2009 - German papermaker August Koehler reportedly may be buying then retrofitting NewPage's shuttered mill in Kimberly, Wisconsin, according to a news story in Milwaukee's Journal Sentinel based on information from Forestweb.

A spokesperson for Koehler, Sandra Kiefer, told PaperAge that the company could not comment on "rumors" or provide other information at this time.

Back in July 2008, the Koehler Group's executive board had proposed to expand the company's Thermal Papers division via a project to build a new thermal paper mill in the southeast U.S., with start-up expected at the end of 2010.

However, the company switched gears in October, shelving the idea to build a new mill and moving towards an acquisiton of an existing facility in the U.S.

"...the plans for the establishment of a new thermal paper production facility in the southeastern United States have been put on hold, as the borrowed capital necessary to cover the cost of this investment appears neither conceivable nor strategically justifiable at this time," said Werner Ruckenbrod, Koehler's Managing Director in his December report from the Executive Board.

"Instead, it has been agreed with the project partners that we shall maintain an increased focus on the acquisition of a papermill that can be converted for the production of thermal paper at reasonable and justifiable expense," Ruckenbrod said.

"In actual fact, our project group has already identified a suitable factory," he added.

Ruckenbrod said that due to a confidentiality agreement "with the potential vendor," he could not disclose further information about the deal. But, he did say, "we plan to conclude the acquisition in the first quarter of 2009, thus enabling an anticipated start of production in the first quarter of 2010."

So far, reports of the sale of the mill have been met with optimistic caution.

"At this point, we have had no confirmation about a sale, and these are just rumors we're hearing through trade publications," said United Steelworkers union Local 2-9 president, Andy Nirschl. "We hope Koehler is interested, and we're sure that if they take a good look at what we have to offer here, they will be interested in adding the Kimberly assets to their papermaking portfolio."

At the time of its shutdown in August 2008, the Kimberly mill had been operating two paper machines, Nos. 96 and 97, which produced about 500,000 tons per year of coated freesheet.

Some 475 employees lost their jobs when the mill was closed, in addition to the 125 workers affected by the shutdown of the mill's No. 95 paper machine in May 2008.

SOURCES: Papierfabrik August Koehler AG (The Koehler paper Group), and EUWID

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