Weyherhaeuser Considers Selling Norpac Liquid Packaging Plants in Longview

 

According to a report earlier this week by the Longview Daily News, Longview, Wash., USA, Weyherhaeuser (Federal Way, Wash.) is considering selling Norpac and its liquid packaging plants in Longview as part of the evaluation of its cellulose fibers business, in which profits have sagged over the last year. 

The company says it will consider a broad range of alternatives, including continuing to hold and operate the business, selling it, or spinning it off. In addition to the plants in Longview, the company is also reportedly evaluating mills in Georgia, North Carolina, Mississippi, and Alberta, Canada. The company's two Longview plants employ about 990 workers.

 

"We believe now is the right time to evaluate all options to ensure the best long-term results for this business and at the same time create the most value for our shareholders by further focusing our portfolio," said Doyle R. Simons, Weyerhaeuser's president and CEO in a prepared statement. 

 

There is no way to tell at this point whether any mills will be specifically sold or changed, and the company said it will not comment further while the evaluation process is in play. No timeline was announced. This announcement was largely overshadowed by the news that the company will be merging with Plum Creek to create a $23 billion timber real estate investment trust. 

 

"It makes sense to look at streamlining... when you're already going through a big internal restructuring," said Paul Latta, industry analyst at Glacier Peak Capital.

 

Norpac, founded in 1979 as a non-union mill, employs about 450 workers in Longview. It is currently owned as part of a 50-50 joint venture with a Japanese company. According to the report, many workers weren't surprised by the company's announcement. The forest products company has been shedding paper and pulp mills for some time now to concentrate on timber and lumber sales. 

 

If the Longview mills are sold there is said to be only a remote possibility they would close. Two Pacific Northwest paper mills have announced closures in recent months, and analysts have said that tightened newsprint supplies allowed Norpac to raise its domestic prices Monday. Norpac also markets other paper products such as "Natural Choice" office/copy paper.

 

Weyerhaeuser's cellulose fibers business accounted for 25% of the company's net sales in Q3 of this year, generating $471 million. That's down from $507 million in the same period this past year. So far this year, the cellulose fiber division brought in $157 million in operating income, a 23% dip from the same period in 2014.