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Clearwater Paper Corp., the Spokane-based maker of tissue and paperboard products, says it isn't economically feasible to split into two separate entities, as suggested recently by a large shareholder group.
After completing an analysis that looked at the possible benefits of separating its consumer products segment from its pulp and paperboard business, Clearwater is forging ahead with its strategic goals as a producer of private-label tissue and bleached paperboard. That plan, it says, includes fully integrating by the end of this year the operations of Cello Tissue Holdings Inc. that it acquired in late December 2010.
It also plans to ramp up production at a new tissue manufacturing and converting facility in Shelby, N.C., where a paper machine for making high-end tissue is expected to be online soon and at capacity by 2014. The facility now runs two converting lines, which splits huge tissue rolls into smaller tissue products, and it eventually will have five such lines.
Clearwater Paper's management and board, as well as external financial and legal advisers, considered different options for company growth during a three-month analysis through last month. It also reviewed a recent proposal filed by SAC Capital Advisors LP, a Stamford, Conn.-based investor hedge fund, urging Clearwater to split itself into two parts and to consider selling one or both divisions.
Gordon Jones, Clearwater's retiring chairman and CEO, couldn't be reached immediately for comment. However, at a global industrial conference held in Las Vegas last month, he said a key argument against splitting the firm is the importance of its Lewiston, Idaho-based manufacturing complex and how integrated that 840-acre site is for pulp, paperboard, and tissue production.