Economics

Fluff and softwood pulp production capacity to increase by 400,000 tons

International Paper Co. plans to spend $135 million to convert a North Carolina plant to raise its production of fluff pulp used in consumer goods such as diapers, feminine hygiene and adult-incontinence products.

In a related move, International Paper agreed to sell the Carolina brand, used for printed materials such as greeting cards and brochures, to MeadWestvaco Corp.

Terms of the deal, expected to close at the end of April, weren’t disclosed.

International Paper said fluff and softwood pulp production capacity will increase by 400,000 tons, with flexibility to shift between the two products. The company estimates the conversion will allow the production of 1.4 million tons of high-quality fluff a year. The new fluff pulp capacity is expected to ramp up in mid-2016.

As a result of the plant conversion, International Paper also will reduce its coated paperboard capacity by 350,000 tons, part of the company’s effort to focus the remaining paperboard business on the food-service and packaging markets.

MeadWestvaco executive Bob Feeser said the acquisition will expand the packaging company’s ability to serve the commercial and specialty print markets. MeadWestvaco also expects significant operational improvements from the integration of the business into its existing mill system.



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