Pactiv Evergreen Inc. has announced that it has signed an agreement to sell its Pine Bluff paper mill and Waynesville, N.C., extrusion facility to global paper and pulp producer Suzano S.A., a Brazilian company, for $110 million in cash, according to a news release posted on the Pactiv Evergreen site.
Suzano has agreed to offer employment to current workers at Pine Bluff and Waynesville.
During an earnings call in March 2023, company officials said it was looking for “strategic alternatives” for the Pine Bluff mill, which had 770 employees at the time. The importance of the Pine Bluff and Waynesville mills was highlighted during the call, but one executive said a sale was a possibility, according to a previous article in The Commercial.
The Pine Bluff mill produces liquid packaging board and cupstock used to make fresh beverage cartons, paper cups and other fiber-based food and beverage packaging. Waynesville provides incremental extrusion capacity for the board produced at Pine Bluff.
“Pactiv Evergreen and Suzano have also agreed to enter into a long-term supply arrangement at the closing of the transaction pursuant to which Suzano would use Pine Bluff and Waynesville to supply liquid packaging board to Pactiv Evergreen’s converting business,” stated the press release, which was posted on the company’s site sometime Friday.
Independent reporting for Pine Bluff & Jefferson County since 1879.
“The sale of Pine Bluff and Waynesville concludes the strategic alternatives review process,” Michael King, president and CEO of Pactiv Evergreen, stated in the news release. “This Transaction is consistent with our disciplined focus on value creation, and we expect it to reduce the capital intensity of our business, improve our cash flow profile and further strengthen our balance sheet.”
King added, “We put considerable thought into positioning Pine Bluff and Waynesville for the future and believe this Agreement serves the best interests of our stakeholders and our local communities. I want to thank our Pine Bluff and Waynesville employees for their significant contributions to Pactiv Evergreen and continued dedication to our customers.”
The new release said that the transaction is anticipated to close in the fourth quarter of 2024.
“We are a Brazilian multinational company with 100 years of history,” Suzano states on its own website. “We learned from trees that life is always renewing itself and that, with them, it is possible to create a more sustainable future.”
“This will expand the company’s operations in North America and marks its entrance into the consumer and food service packaging segments in the region,” stated Suzano in its own news release.
“Suzano is currently the largest supplier of hardwood market pulp in North America, with U.S. offices in Fort Lauderdale, Fla., and a research and innovation campus close to Vancouver, Canada,” stated the release. “Already a major producer of materials for food and beverage packaging in Latin America, Suzano will work alongside Pactiv Evergreen’s team, leveraging its operational knowledge and experience in the paperboard business to enhance the structural competitiveness and profitability of the acquired assets, which are already comparatively well-positioned on the cost curve of the North American packaging industry.”
“This acquisition is in line with our strategy,” Fabio Almeida, executive vice president of paper and packaging at Suzano, said in the news release. “We are entering the North American market as a competitive producer of paperboard, taking on quality assets that are strategically well-located from an operational and logistical perspective, and opening new opportunities for growth.
“As a business with 100 years of history behind us, we see this deal as an investment into our future and we look forward to building a long-lasting and positive relationship with the teams at Pine Bluff and Waynesville, as well as the local communities around both facilities.”
Suzano’s press release said the “acquired assets benefit from high availability of wood in the region, low energy costs, and good access to railways, ports, and highways.”
Pactiv Evergreen announced in July 2021 it was exiting the coated groundwood paper business and would “permanently cease” production of coated groundwood paper at its Pine Bluff plant, according to the The Commercial article.
That move, which was finalized toward the end of 2021, closed the No. 1 machine at the mill. The much larger No. 2 machine, which continues to operate, makes coated paper used in milk and juice cartons, among other items.
Pactiv Evergreen said in 2021 in announcing the closure of the groundwood paper line at the mill that the company will continue to “strategically invest” in the Pine Bluff mill, “which will remain an essential facility in the Pactiv Evergreen operations network, serving the fiber-based beverage packaging market.”
“With the decline in the coated groundwood market, our decision to exit this business enables us to reinvest resources into our strategic core competency of liquid packaging board as well as other more profitable segments across the enterprise,” King said in a press release at the time.
International Paper Co. announced in 1956 that it was going to build a paper mill in Pine Bluff. In 2007, the company that created Evergreen Packaging bought the Pine Bluff mill.
Allison Thompson, president and CEO of the Economic Development Alliance for Jefferson County, said Pactiv sale was not unusual for big industrial operations with have huge assets.
“Companies routinely make decisions about what assets they will keep and how they will use those assets in,” she said. “The fact that this was sold doesn’t mean that the asset is going away. I’m glad they were able to find a buyer that fit their needs.”
Thompson said the purchase of the mill by a foreign company was not the first such acquisition of industry in Pine Bluff.
“Industry is global,” she said. “It is an absolute good thing that Pine Bluff has that kind of exposure and those kinds of connections.”