PRYOR, OK, Nov. 25, 2013 (PRNewswire) -Orchids Paper Products Company today announced its plans to invest $30.4MM to upgrade its paper making and converting assets in Pryor, Oklahoma.
The paper mill project will replace two existing paper machines and start-up in approximately 20 months. The new paper machine will be supplied by Recard, S.p.A, providing the following advantages:
The converting line project is an upgrade to an existing asset and will improve manufacturing flexibility and capacity with a lower cost structure. This project is expected to be completed by the end of 2014 and to generate an additional annual EBITDA of $2.8 million to 3.4 million when fully utilized.
Mr. Jeff Schoen, the Company's President and Chief Executive Officer, said, "Orchids is implementing an "upgrade and debottleneck" strategy that improves our manufacturing flexibility, capacity, and cost structure. These projects increase our ability to produce higher quality grades of value and premium products supporting our vision of being recognized as a 100% retailer-focused, national supplier of high quality consumer tissue products in the value, premium, and ultra-premium product categories."
"We are pleased to further our relationship with Recard. Due to the success of our previous paper machine project with them, we believe they are an excellent choice as the supplier for this next phase in improving our paper making capabilities."
Mr. Schoen also stated, "Furthermore, we anticipate the increased production capacity and reduced operating costs associated with this plan will create long-term value for our stockholders. We do not expect this level of capital investment and associated leverage to impede our ability to return excess cash to our shareholders."
About Orchids Paper Products Company
Orchids Paper Products Company is an integrated manufacturer of tissue paper products serving the at home private label consumer market. From its operations in north east Oklahoma, the Company produces a full line of tissue products, including paper towels, bathroom tissue and paper napkins, to serve the value through premium quality market segments. The Company provides these products to retail chains throughout the United States.