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Wausau Paper to leave technical paper printing and focus on tissue

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Wausau Paper announced Friday it is narrowing its focus to its tissue business and that means the Brainerd mill will not be part of the company’s future.

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But when that will happen is undetermined.

“Our intention is to focus on the tissue business,” said Perry Grueber, director of investor relations. “We’re not in a position to give you any specifics on how that occurs and no timeline. The process to evaluate the range of options we are considering is still under way.”

Grueber said he couldn’t say whether options include selling the Brainerd mill to another company only that it will ultimately not be part of Wausau Paper’s future.

“At some point in the future we will be leaving the technical specialty business,” Grueber said. “We’ve been evaluating different avenues to do that for more than the last year.”

Grueber said the company’s technical paper mills in Brainerd, Mosinee, Wis. and Rhinelander, Wis. are each solid businesses.

“The overall technical speciality business is a business we’ve run for many years,” Grueber said, but added the company is now looking at opportunities to grow its tissue business and they are more attractive.

Wausau Paper was founded in 1899 on the Wisconsin River.

In November, eight years to the day from Wausau Paper’s first production at the Brainerd mill, the company announced layoffs and the end to its paper production here. The mill employed 137 hourly staff and 34 salary workers and announced 48 hourly workers and seven salary employees would be losing their jobs here. Most of those layoffs came at the end of 2012.

Wausau Paper reported those layoff were the impact as the company left the last vestiges of its print business.

In early 2012, Wausau Paper exited its legacy print and color business. The company reported it was narrowing the focus of its paper segment to “specialty products with leading domestic and global positions in food, industrial and tape markets.”

Now, nearly two months later, the company announced it would be leaving its technical paper printing business as well as it narrows its focus once more — this time to tissue. Wausau Paper produces Bay West brand towels, tissue, soap, wipers and dispensing systems used in schools, hotels, factories, health-care facilities and airports among other locations.

The Milwaukee Wis. Journal Sentinel reported Wausau Paper plans to sell the two mills in Wisconsin and the one in Brainerd. “Manhattan-based hedge fund Starboard Value LP acquired the largest stake in Wausau in 2011 and since then has pressured the company to divest and close any operations not associated with tissue and towel,” the Journal Sentinel reported.

Since exiting the print and color business, Wausau Paper reported it retained financial advisers to assist the company’s board of directors in the evaluation of alternatives for the remainder of its paper segment.

“Our tissue segment has demonstrated strong profitability and exceptional growth over the last decade,” said Hank Newell, Wausau Paper president and CEO, in a news release. “We believe our shareholders’ interests will be best served through a singular focus on successfully marketing the capacity and capability of our new tissue machine and sustaining the historically strong growth and profit performance of our tissue business.”

Wausau reported it “cannot provide assurance of the timing, terms or completion of a transaction related to the strategic alternatives for the paper segment.”

Wausau Paper recently began a start-up phase of a $220 million tissue capacity investment at Harrodsburg, Ky.

“The project will accelerate growth of (the company’s) tissue segment and further establish its ‘green leadership’ position ... and the introduction of new-to-the-market premium recycled products.”

Other than the Kentucky plant, Wausau Paper has a mill in Middletown, Ohio and a distribution facility for its towel and tissue business in Danville, Ky.

In 2011, the Brainerd mill completed a $27 million capital investment that rebuilt the No. 7 paper machine to make technical and specialty grades, such as those used to produce masking tape and to a limited degree packaging for the food industry.

Wausau Paper reported it began a process last year to “identify strategic alternatives for its paper segment that will position the company to focus its management efforts on continuing the growth of its highly successful tissue business.”

RENEE RICHARDSON, senior reporter, may be reached at 855-5852 or renee.richardson@brainerddispatch.com. Follow on Twitter at www.twitter.com/Dispatchbizbuzz.

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Renee Richardson
Richardson is a Pacelli High School graduate from Austin, Minn., who earned an applied science degree from the University of Minnesota, Waseca, with an emphasis in horse management. She worked extensively in the resort industry. She received an associate’s degree from Central Lakes College, where she was editor of the Westbank Journal student newspaper, as well as a summer intern at the Dispatch. She graduated from St. Cloud State University summa cum laude with a bachelor’s degree in mass communications and interned at the St. Cloud Times covering business while attending SCSU. She's been with the Brainerd Dispatch since 1996.
(218) 855-5852
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