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Mar 19, 2002 12:00 AM
Sappi Ltd. (Johannesburg, South Africa), a major producer of coated fine paper, has reached an agreement to acquire Potlatch Corp.’s (Spokane, WA) coated fine paper business and its Cloquet, MN, pulp and paper mill for $480 million. As part of the transaction, Potlatch will cease production of coated paper at the 140,000 short-ton-per-year Brainerd, MN, coated paper mill and bear the related costs.
"We believe the Cloquet pulp mill and coated paper assets have the potential to generate world-class returns," says Eugene van As, Sappi chairman. He notes that a new, $525 million, state-of-the-art pulp mill with a design capacity of 450,000 short tons per year was commissioned in 2000 at the Cloquet site. "We are confident that bringing Sappi’s knowledge of pulp manufacturing to this mill, which had initial start-up problems, will result in fine performance," the exec concludes.
In 2001, Potlatch’s pulp and coated-paper division reportedly had total annual net sales of $464 million.