Weyerhaeuser sale won’t change Austin operations

Published 9:29 am Monday, July 14, 2008

A multi-billion dollar deal involving Weyerhaeuser Co. and International Paper Co. won’t affect a local packaging facility, according to Austin staff, who say that only legal formalities will follow as assets exchange hands.

“There are no planned changes to the method of operation for this site,” site manager Jeff Linkous said. “This request is strictly for a change of name and ownership.”

In the last weeks, the city council and port authority have approved permit and lease transfers for the container board and packaging facility to International Paper Co., which announced its intention to purchase multiple Weyerhaeuser’s outfits for $6 billion in March.

Email newsletter signup

According to Weyerhaeuser spokesperson Bruce Amundson, the deal satisfies market goals for both companies, which are looking to develop certain niche products already within their capacity.

“We’ve been looking at our strategic force moving forward … which businesses we feel is a strategic fit for us, and that we feel we can grow in the future,” he said.

In Weyerhaeuser’s case, its integrated-forest products — “virtually from the forest to the actual product.”

This left local facilities like Austin’s outside the company plan.

“Container board was not a fit,” Amundson said. “On the flip side for whom it was a fit was International Paper Company.”

International Paper ultimately purchased all of Weyerhaeuser’s container board, packaging and recycling locations, which included 72 packaging sites like Austin, and about four dozen other types of mills and manufacturers.

Amundson said the city’s facility fills a geographic gap for International Paper, though he couldn’t comment on future plans.

According to its Web site, International Paper believes it will profit about $400 million annually from the acquisition.

“The company expects to achieve at least 40 percent of the improvement within 12 months of completing the deal, with the remainder fully realized by the end of the third year…,” said its Web site.

They expect to close the buys Aug. 4.

Opened in 1957, the Austin Weyerhaeuser facility, at Eighth Street Northeast, employees more than 130 people.

Despite repeated attempts, representatives from International Paper Co. did not return phone calls. In letters, local managers said that the company would continue operations unchanged, and deferred interviews to Amundson.