Kruger Acquires Shepherd Tissue of Memphis
Kruger Inc. has acquired Shepherd Tissue Mill (Memphis, TN) and will expand it under the new name of Global Tissue. Purchase price and terms were not disclosed, but company officials said they plan to inject $40 million into upgrading the mill and improving the quality of the product.
Acquisition of Shepherd complements Kruger's strategic expansion in the North American tissue market. Two years ago, the company purchased Scott Paper Ltd. of Canada, which is the largest manufacturer and supplier of tissue products in Canada.
Scott Paper Ltd. will provide a number of synergies to Global Tissue, according to company officials, including marketing, sales, technical innovation, and new product development. With the acquisition, Kruger will have a total tissue capacity of 500,000 m.t./yr, which represents 50 million cases of finished goods.
The Kruger family has been manufacturing tissue products for the past 40 years in South America. It has mills in Venezuela, Peru, Colombia and Ecuador. It is also one of the largest private label tissue producers in the UK. "The Shepherd Mill has tremendous potential," said Joseph Kruger, chairman and CEO of Montreal-based Kruger. "The mill has the capability to produce high-quality products and is perfectly located to serve both retail and commercial/ industrial customers in the southeastern, central, and mid-Atlantic states. In addition, the site has more than adequate room for expansion."
Kruger said the company's immediate focus will be "on upgrading product quality and operating practices, providing improved quality and service to our retail private-label customers, and developing a commercial/industrial business along the lines of our successful business in Canada."
Located on an almost 80-acre tract just north of downtown Memphis, the mill employs more than 450 persons and provides bathroom tissues, facial tissues, and related products to a number of major U.S. retailers. Much of its business is for the private-label market. Formerly occupied by Kimberly-Clark, the mill has 56-acres of manufacturing and storage under roof.
Dennis Stewart, a former executive with Scott Paper Co. in Philadelphia, will be managing director of the new company. Global Tissue employees ratified a 10-year contract with the company last week, initiating what the company hopes will be an on-going partnership with the union, according to Stewart.
Kruger Inc. is a privately held tissue and pulp and paper manufacturing company. It produces tissue, newsprint, lightweight-coated and supercalendered papers, specialty recycled groundwood papers, packaging, and lumber.