Kimberly-Clark Divests Southeast U.S. Timberland Operations
Kimberly-Clark Corp. has agreed to sell its southeast U.S. timberlands and related operations to an affiliate of Southstar Timber Resources LLC, a company organized by ACI Capital Co., a New York-based investment firm. The tracts include 529,000 acres of woodlands in Alabama, Mississippi, and Tennessee. The sale, which is subject to regulatory clearances and completion of financing by Southstar, is expected to close early this year.
As previously announced, the sale of the woodlands is associated with the planned closure of Kimberly-Clark's Mobile, AL, chemical pulp mill this September. In the meantime, the company has entered into a supply agreement with Southstar to purchase wood until the closure of the Mobile pulp mill.
At Mobile, Kimberly-Clark plans to shut down the chemical pulping operations that support tissue production at the mill it acquired several years ago from Scott Paper Co., and replace it with furnish from a new recycled fiber line there. SAPPI, who bought the S.D. Warren fine paper operations that Scott Paper was operating alongside the tissue mill, has been purchasing pulp from Kimberly-Clark, but will have to make new arrangements after the pulp mill is shut down in September.
"The southeast timberlands is an excellent operation with experienced personnel who will be valuable assets to their new employer," said Wayne Sanders, chairman and CEO of Kimberly-Clark. The operations employ more than 500 people and deliver approximately 5.4 million tons of wood fiber annually.
Southstar will offer positions to all active employees of the timberland operations and, in addition to supplying wood to Kimberly-Clark's pulp mill, will continue to operate the export chip, pole, and mulch businesses in the Mobile area.
"With this divestiture of non-core assets, Kimberly-Clark will have virtually completed its transformation into a global enterprise with a portfolio of strong consumer and health care brands," Sanders said. "The sale of the woodlands operations will enable us to further focus our resources on expanding our core tissue, personal care, and health care businesses."
The company said it will use the proceeds from the sale primarily to fund acquisitions and its ongoing share repurchases. During 1998, the company acquired or increased its investment in businesses in Bolivia, Brazil, China, and Korea, and repurchased 19.5 million shares of its common stock.
Kimberly-Clark Corp. is a leading global manufacturer of personal care, consumer tissue, and away-from-home products. Its global brands include Huggies, Pull-Ups, Kotex, Depend, Kleenex, Scott, Kimwipes, and WypAll. Other brands well known outside the U.S. include Andrex, Scottex, Page, Popee, and Kimbies.
The company also is a major producer of professional health care products and premium business and correspondence and technical papers. It has manufacturing operations in 39 countries and sells its products in more than 150 countries.