Blue Ridge Paper in talks with Rank

Pulp & Paper, May 2007

PACKAGING

Blue Ridge Paper said it was in "preliminary discussions" with The Rank Group, which owns New Zealand-based Carter Holt Harvey (CHH), about a potential acquisition deal by Rank. If a deal is done, Rank with CHH would have capacity to make about 750,000 tons/yr of bleached board for beverage packaging from mills in Canton, NC, and Pine Bluff, AR. Blue Ridge Paper is majority owned (55% share) by KPS, which purchased the company and mill in Canton that was to be shut by Champion International in 1999.

Over the last two years, Blue Ridge Paper lost $1.4 million and $20.7 million, respectively. Next year, the company's $125 million in bonds come due. The Canton mill had a strong production year in 2006, making 281,386 of uncoated papers and 275,260 tons of bleached board paper, and sales rose 12% to $570.6 million.

Blue Ridge Paper, which also has a stable of converting plants, was rumored to have tried to acquire International Paper's (IP) beverage packaging business last year. CHH paid $413 million for IP's beverage packaging assets in North America, which include gable-top plants in five states and two provinces, and a 460,000 ton/yr bleached board and 195,000 tons/year coated mechanical paper mill in Pine Bluff.

CHH/Rank also is finishing off a deal with IP to acquire IP's other beverage packaging plant assets, which includesubsidiaries in China, South Korea, and Taiwan, and joint ventures in Latin America, Israel, and Saudi Arabia. IP fully integrated Pine Bluff board output with its converting plants in North America and around the world.