Orchids Paper Products to Build New Tissue Manufacturing Plant in South Carolina

The new faciltiy will include a tissue paper machine with papermaking capacity between 35,000 and 40,000 tons per year and two converting line.

April 20, 2015 - Orchids Paper Products Company announced that its Board of Directors has approved plans to build an integrated manufacturing site in Barnwell, South Carolina. The project will include a tissue paper machine with paper making capacity between 35,000 and 40,000 tons per year and two converting lines with converting capacity between 30,000 and 32,000 tons per year, which are capable of producing value through ultra-premium grades of tissue products.

"This project furthers our vision to become a national supplier of high quality consumer tissue products," said Jeff Schoen, Orchids' President and Chief Executive Officer. "Our June 2014 partnership with Fabrica provided the first step towards that goal by expanding our reach to the West Coast, beyond our original Oklahoma manufacturing site.

"The next step is our planned Barnwell facility, which is being built specifically to expand our geographic reach to best serve existing and new customers on the East Coast and to be world class in our capabilities to design and manufacture high quality products with a competitive cost advantage," Schoen said.

Orchids said it expects that the total cost of the facility to be in the range of $110 to $127 million, which will be deployed over the next two years, with approximately 40% occurring in 2015 and the remainder in 2016 and early 2017.

The Barnwell facility will include a paper machine, a recycling facility, two converting lines, buildings to house the paper machine and converting lines and land. Groundbreaking is anticipated during the the second quarter of this year.

Build-out and start-up of the converting lines will come in phases, with the first line expected to become operational at the end of 2015 and the second line to become operational in the second quarter of 2016. Engineering and construction of the paper machine are expected to begin in the second quarter of 2015 and it is expected to become operational in early 2017.

The company expects to fund this project using the proceeds from a potential follow-on common stock offering, additional bank borrowings and cash flow from operations.

"We anticipate that the Barnwell facility, in conjunction with our access to structured tissue paper on the West Coast, will increase our ultra-premium tissue offerings across the U.S., as well as provide high quality products across our value and premium offerings," Schoen said.

"Local and state governmental entities in South Carolina provided strong economic incentives for the Barnwell project. We anticipate the facility will employ approximately 130 full time employees," he added.

Orchids Paper Products Company is an integrated manufacturer of tissue paper products serving the at home private label consumer market. To learn more visit: www.orchidspaper.com.

SOURCE: Orchids Paper Products Company