Georgia-Pacific to upgrade Crossett mill

AP News
Posted: Oct 20, 2010 6:21 PM
Georgia-Pacific to upgrade Crossett mill

The jobs of 1,300 workers at a Georgia-Pacific LLC mill in Crossett became more secure Wednesday with the company's announcement that it will spend $250 million to upgrade the facility.

The mill produces a variety of paper towels and tissues for home and commercial use. It's part of an operation that employs more than 2,100 people in Ashley County. About 40 jobs will be added when the upgrade is complete.

Georgia-Pacific President and Chief Executive Jim Hannan said the company's Quilted Northern line of bathroom tissue is the focus of the upgrade. The new equipment will allow production to increase while reducing use of fiber, water and energy.

The improved efficiency won't result in job losses, Hannan said at a news conference with Gov. Mike Beebe at the state Capitol.

"We're not upgrading to fire people," Beebe said.

About 60 percent of production at the mill is for consumer products, such as Quilted Northern and Angel Soft bathroom tissue and Sparkle paper towels. The mill also churns out paper hand towels and bathroom tissue for use at schools, airports and other large facilities.

Hannan said the new equipment will enable the company to improve softness and absorbency of Quilted Northern.

The project will create about 400 construction jobs.

Atlanta-based Georgia-Pacific has a chemical operation, two plywood plants and a procurement facility, all in Ashley County.

Beebe said the news was particularly welcome because south and east Arkansas have been hit harder by the recession and job losses than other parts of the state. He said it is important for Arkansas to move toward more high-tech employment and manufacturing that requires a higher skill level, but Beebe said it is also critical for the state to preserve the jobs it already has.

The $250 million investment signals that Georgia-Pacific has long-term plans to keep operating in southeast Arkansas, he said.

"As Jim said to me, 'You don't throw $250 million down a rat hole,'" Beebe said.

The state offered incentives that include a five-year, 3 percent income tax credit on payroll for new workers, sales tax credits for equipment and help training employees. Ashley County will get a $435,000 grant that will help the plant pay for moving and installation of the new equipment.

Crossett Mayor Scott McCormick said people from surrounding communities work at the mill, so the region will benefit. Crossett has about 6,200 people, and about 24,000 live in Ashley County, which borders Louisiana.

Georgia-Pacific earlier said that it would spend $500 million in production upgrades at its facilities. Hannan noted that Crossett won the company's safety award in 2008 and 2009.

"One of the key underpinnings of our decision (to upgrade the Crossett facility) is the tremendous safety performance in the mill," Hannan said.

Including operations in Crossett, privately held Georgia-Pacific has 10 facilities in Arkansas, employing 3,100. The company has wood and fiber supply facilities in Fordyce and Gurdon, plus tax and sales offices in North Little Rock and Crossett.

Georgia-Pacific has about 300 facilities in North America, South America and Europe, and has about 40,000 employees.

(This version corrects number working in Crossett to 2,100 instead of 3,100.)