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Merger Impact On Union Camp Plant Unclear

BY ANDREW GOROSKO

International Paper and Union Camp Corporation have agreed to merge in a

tax-free, stock-for-stock exchange.

Union Camp and International Paper are diversified forest products companies

with $4.4 billion, and $20.1 billion, respectively, in 1997 net sales.

The merger transaction, which is valued at $6.6 billion, including the

assumption of debt, is subject to approval by International Paper and Union

Camp shareholders, as well as by federal regulatory agencies.

The merger is expected to close at the end of March, according to Union Camp.

It is unclear, what effect, if any, the planned merger will have on the Union

Camp factory on Edmond Road.

Molly Sullivan, a spokeswoman for International Paper, said Thursday the

ramifications of the merger will be made public in March or April.

Rand-Whitney Container LLC of Worcester, Mass., has been negotiating with

Union Camp to buy the factory which Union Camp now uses for cardboard box

manufacturing. Rand-Whitney would use the building for the same purpose.

Union Camp Corporation announced last spring it would be closing and

liquidating the assets of its local container plant because of "unfavorable

economic and market conditions."

The plant, which has employed more than 100 people, manufactures cardboard

boxes and graphic displays such as those used in stores to promote products.

Of the future of Union Camp's Edmond Road plant, Ms Sullivan said "Decisions

of that nature will not be announced until the merger is finalized."

Similarly, a Union Camp spokeswoman said it's unclear what the future holds

for the local factory. "It's too early to tell about our locations," she said.

The 130,000-square-foot plant includes paper cutting and packaging equipment,

a warehouse and shipping operation, and a sales force.

The merger is expected to result in $300 million in cost savings through a

combination of reductions in overhead, process improvements, facility

rationalization, purchasing and logistics savings, according to Union Camp.

Union Camp employees 18,000 people. International Paper employs 80,000 people.

The town's Water Pollution Control Authority recently tentatively approved

Rand-Whitney's proposal to extend a municipal sewer to the Edmond Road

factory. Whether Rand-Whitney will now buy the plant is unclear.

Union Camp owns approximately 1.5 million acres of southeastern US woodlands

that provide the raw material for most of its products. It operates four pulp

and paper mills in the southeast that produce white paper for business forms,

printing, direct mail and other communications uses, plus unbleached kraft

paper and linerboard, primarily for packaging materials.