India, China Buyers Interested in Restarting WestRock's Newberg Mill

 

In October 2015, WestRock, Atlanta, Ga., USA, completed the acquisition of the Newberg mill in Oregon, USA, (photo below) and the Dublin mill in Georgia from SP Fiber Holdings for $288.5 million. About six weeks later, WestRock indefinitely idled the Newberg mill, and in Jan. 2016 announced its permanent closure. 

According to a recent story (June 19, 2018) in the Portland Tribune (Oregon), the new owner of Newberg's shuttered paper mill now says it's open to "all options" for selling the mill, after the Portland Tribune published a story documenting the company's efforts to assure the mill's papermaking machinery is turned into scrap metal so it can't be reused to make pulp or paper.

As explained in the Portland Tribune article, Oregon's recycling industry has high hopes that an empty paper mill in the Northwest can be restarted, providing a market for the mountains of scrap paper that are piling up since China halted purchases of mixed paper and plastics collected in a curbside recycling program.

As reported two weeks ago, Rahul Kejriwal, a businessman with ties to the paper industry in India, was rebuffed in his effort to buy the mill from Atlanta's WestRock Co., and was told the equipment must be demolished. WestRock had inked a contract to sell the plant to KBD Enterprises LLC in January, including a six-page list of papermaking equipment that had to be taken apart and scrapped as a requirement of the sale. The leaked sales contract was included with other documents submitted last month (May 2018) by the Association of Western Pulp and Paper Workers in a bid to get intervention by the Antitrust Division of the U.S. Department of Justice.

WestRock initially didn't return calls requesting comments, but on Monday, after the story came out, WestRock director of corporate communications John Pensec called and said the KBD Enterprises deal is dead because the buyer couldn't fulfill terms of the $8.25 million purchase agreement, the Portland Tribune reported.

"That particular transaction failed to close by the contract's deadline, which was May 29," Pensec said. "We're disappointed it didn't close because the potential buyer was not able to obtain financing."

Kejriwal had offered to pay $15 million for the mill, though only $5 million of it would come up front, with the rest paid over 10 years, $1 million per year. Kejriwal has been supported by the millworkers union, which wants to get its laid-off workers re-employed in Newberg, the Portland Tribune noted.

Pensec said WestRock couldn't negotiate with Kejriwal at the time because it was under a contract with KBD. But now WestRock is open to multiple purchase offers that have come in, he said.

"At this point, we're evaluating all options for the site," Pensec said. "We're assessing the best use of the Newberg facility."

Those options include restarting it as a paper mill, though the company would expect a larger price for a buyer planning to operate a mill, he said.

Greg Pallesen, president of the Portland-based Association of Western Pulp and Paper Workers, was skeptical that WestRock had a real change of heart.

"That's great, fantastic news, if WestRock is truly serious. And if they are, they would be calling Rahul (Kejriwal) ASAP," Pallesen said in the Portland Tribune article, when told of Pensec's remarks. 

WestRock also previously told the union they wouldn't allow the papermaking equipment to be reused, during formal labor talks when the work force was being laid off, Pallesen said.

Pallesen said Kejriwal wants to use local recycled paper to make newsprint in Newberg for export to India, which is not directly competing with WestRock.

The full story Chinese company also wants to restart Newberg paper mill is available at the Portland 

Tribune.

SOURCE: Portland Tribune