Clearwater Paper Corporation has announced the company has entered into an agreement to sell its Lewiston, Idaho, sawmill to Idaho Forest Group of Coeur d'Alene, Idaho.
The transaction includes the sale of Clearwater Paper's sawmill, planer mill, dry kilns, and related assets along with log and finished goods inventories and timber under contract, in the aggregate amount of approximately $30 million. As part of the transaction, the two companies have entered into a long-term residual fiber supply agreement with the goal of delivering consistent supplies of chips and sawdust to Clearwater Paper's Lewiston pulp mill from Idaho Forest Group Mills.
"This has been a very careful and thoughtful decision for everyone at the company," said Tom Colgrove, president of pulp and paperboard at Clearwater Paper. "We believe that this is the best possible outcome for the mill and its continued operation in the region, our company and our shareholders."
Clearwater Paper is expected to ramp down production in the coming weeks in preparation for Idaho Forest Group to officially take possession in the fourth quarter of 2011. Clearwater Paper's approximately 250 affected employees will receive severance and all provisions subject to the WARN Act, which includes up to 60 days' worth of pay and benefits.
"We believe the tough times in the lumber industry will continue into the foreseeable future, and that the mill will be operated by a company whose core focus is lumber," said Colgrove. "We believe IFG has the people, resources and the business structure to make the Lewiston sawmill very successful."
Upon closing of the transaction, Idaho Forest Group plans to adjust production to meet its customer needs. At the same time, Idaho Forest Group will begin assessing employment needs and should initiate the hiring process soon after the close of the transaction. Longer term, Idaho Forest Group will assess the mill's capabilities and prepare an improvement plan for implementation.
"We are very excited about the prospects of updating and revitalizing the Lewiston sawmill," said Scott Atkison, president of Idaho Forest Group. "The mill and its location in the LC Valley and surrounding wood basket give us the ability to better supply our customers with the products they need, both now and into the future."
Clearwater Paper is working closely with the Idaho Department of Labor and the Governor's Dislocated Workers Task Force to assist employees.