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In one of the most sweeping restructurings in corporate America, Scott Paper Co. has completed three steps of its announced four-step plan in less that six months. Designed to increase shareholder value, the plan consists of the following:
*Sell S.D. Warren Unit. The coated papers unit was sold to an investor group headed by South Africa's Sappi Ltd. for $1.6 billion. Proceeds from the Warren's sale will be used to repay part of Scott's $2.3-billion debt, redeploy capital into its global tissue business, and provide funds for a possible repurchase of Scott stock.
*Install new management team.
*Reduce staff by 34%. Called a one-time restructuring, layoffs will come to just shy of 11,000 people when the process is completed by the end of the year.
*Concentrate on core business strategy. Long the world's largest tissue manufacturer, Scott is investing to further improve its competitive position. A second tissue machine is being considered for its $240-million tissue mill in Owensboro, Ky., coming on line next year. Scott introduced 15 new products this year, and plans 30 to 40 introductions next year.
LONG WAY TO NEW BEGINNING. Founded in 1873, Scott began selling bathroom tissue under private labels in the 1880s. In 1902 it launched its own brand, Waldorf, then invented the paper towel in 1907. During the 1950s, the company established joint ventures around the world. Scott now has operations in 21 countries, a presence in 59 others.
S.D. Warren became a part of Scott in 1967. It began operations in Westbrook, Maine, in 1854, making paper from rags for writing and newsprint, and invented clay coating for both sides of a paper sheet in 1881.
Scott ships three million tons of tissue-related items a year, including bathroom tissue, paper towels, napkins, facial tissue, and...