Buckeye to Restart Fluff Pulp Line July 4

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Among other things, the July 4 timeline depends on procurement of materials and the amount of work required to repair and replace drums and other damaged equipment. Both production lines were idled on Sunday evening, June 17, due to a significant failure of a steam drum on the fluff pulp line. There were no injuries associated with this incident.

The company expects that property damage and business interruption insurance will cover most of the losses in excess of its $2 million deductible. Net of insurance recovery, Buckeye estimates the total net earnings impact of the event to be in the range of 5 to 10 cents per share. It expects Q4 FY 2012 (April-June 2012) earnings to be reduced by 8 to 11 cents per share as a result of the event. The net impact on first half FY 2013 earnings (July-December 2012) should be small as Buckeye expects to recognize the bulk of the insurance benefits during this period. It also anticipates that lost production volume due to the outage will reduce sales revenue by about $20 million, primarily in the July to December 2012 period.

Buckeye Chairman and CEO John Crowe notes that "I am proud of our organization's tireless efforts, teamwork, and creativity to minimize the amount of production downtime associated with this significant event. While there is still much work required to get the fluff pulp line safely up and running by July 4, and this date could change, great progress has been made that will help minimize the impact of this production outage on our customers and all of our stakeholders."

Buckeye, a manufacturer and marketer of specialty fibers and nonwoven materials, currently operates facilities in the U.S., Germany, and Canada.