Spokane, Washington, USA, 26 October 2011 -- (BUSINESS WIRE) -- Clearwater Paper Corporation (NYSE:CLW) today announced the company has entered into an agreement to sell its Lewiston, Idaho, sawmill to Idaho Forest Group (IFG) of Coeur d'Alene, Idaho.
The transaction includes the sale of Clearwater Paper's sawmill, planer mill, dry kilns, and related assets, along with log and finished goods inventories and timber under contract, in the aggregate amount of approximately USD 30 million. As part of the transaction, the two companies have entered into a long-term residual fiber supply agreement with the goal of delivering consistent supplies of chips and sawdust to Clearwater Paper's Lewiston pulp mill from Idaho Forest Group Mills.
"This has been a very careful and thoughtful decision for everyone at the company," said Tom Colgrove, president of pulp and paperboard at Clearwater Paper. "We believe that this is the best possible outcome for the mill and its continued operation in the region, our company and our shareholders."
Clearwater Paper is expected to ramp down production in the coming weeks in preparation for Idaho Forest Group to officially take possession in the fourth quarter of 2011. Clearwater Paper's approximately 250 affected employees will receive severance and all provisions subject to the WARN Act, which includes up to 60 days' worth of pay and benefits.
"We believe the tough times in the lumber industry will continue into the foreseeable future, and that the mill will be operated by a company whose core focus is lumber," said Colgrove. "We believe IFG has the people, resources and the business structure to make the Lewiston sawmill very successful."
Upon closing of the transaction, Idaho Forest Group plans to adjust production to meet its customer needs. At the same time, Idaho Forest Group will begin assessing employment needs and should initiate the hiring process soon after the close of the transaction. Longer term, Idaho Forest Group will assess the mill's capabilities and prepare an improvement plan for implementation.
"We are very excited about the prospects of updating and revitalizing the Lewiston sawmill," said Scott Atkison, president of Idaho Forest Group. "The mill and its location in the LC [Lewis Clark] Valley and surrounding wood basket give us the ability to better supply our customers with the products they need, both now and into the future."
Clearwater Paper is working closely with the Idaho Department of Labor and the Governor's Dislocated Workers Task Force to assist employees.
Clearwater Paper manufactures quality consumer tissue, away-from-home tissue, hard roll tissue, machine glazed tissue, bleached paperboard and pulp at 15 manufacturing locations in the United States and Canada. The company is a premier supplier of private label tissue to major retailers and wholesale distributors. This includes grocery, drug, mass merchants, and discount stores. The company also produces bleached paperboard used by quality conscious printers and packaging converters. Clearwater Paper's 4000 employees build shareholder value by developing strong customer partnerships through quality and service.
September of 2008 saw the merging of Riley Creek Lumber and Bennett Forest Industries, and the beginning of Idaho Forest Group. Both of the long-time family owned and operated companies shared common traits that fostered a successful merger, including like commitments to serving customers and employees, investing in facilities, and embracing the forest products heritage. Today, the success of this merger is shown by a growth in capacity and a strengthened focus on the business fundamentals.