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Corrugated : New-Indy to acquire major Southeast independent in Carolina Container

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Corrugated : New-Indy to acquire major Southeast independent in Carolina Container

January 09, 2015 - 09:40

OAKLAND, Jan. 9, 2015 (PPI Pulp & Paper Week) -New-Indy, a joint venture between the Kraft Group and Schwarz Partners, announced that it entered into an agreement to acquire Carolina Container, a major independent converter headquartered in High Point, NC. The deal is to close by the end of January.

Carolina Container operates two corrugator plants in High Point and Hickory, NC, as well as a number of sheet plants, and display and packaging facilities. The acquisition includes CaroCon Display and Packaging formed about a year ago to focus on Carolina Container's growing high graphic operations.

"Carolina Container is a great fit strategically to our existing operations with their broad footprint of corrugated converting operations in the Southeast and ... will be a great addition to New-Indy," New-Indy said in announcing the deal.

"The combination of New-Indy and Carolina Container guarantees Carolina Container's customers long-term security of raw material access, while providing New-Indy an East Coast presence that complements our existing trading strategy," the company added.

New-Indy was formed in mid-2012 to acquire two of three containerboard mills International Paper spun off to gain US Dept of Justice approval for its acquisition of Temple-Inland. The venture acquired IP mills in Ontario and Port Hueneme, CA, with combined capacity of 555,000 tons/yr of recycled containerboard. Hood Container acquired the third IP mill, a 370,000 tons/yr semichemical medium operation in New Johnsonville, TN.

Off-take agreements with IP to buy the output of the three mills have been decreasing each year since the divestiture and are scheduled to expire at the end of June. This left both New-Indy and Hood with a growing amount of containerboard for sale in the open market, according to contacts.

Hood made its own integration move early last year by acquiring Stronghaven, another major Southeast independent with four plants.

One contact estimated that Carolina Container cuts up about 150,000 tons/yr on its two corrugators (110- and 87-in units).

"This is totally an integration play to take pressure off the California mills," the contact said.

*Alliance Sheetsreportedly started up its new 132-in BHS corrugator, the first such wide unit in North America, at a new greenfield plant near Bristol, IN, last October. Schwarz Partners is said to be involved in the $24 million project. About half a dozen 130-in corrugators operate in Europe and China.

CORRECTION: Pratt Industries' new $52 million corrugated plant in Beloit, WI, is to have capacity of 600 tons of boxes per day and become fully operational in January 2016 (P&PW, Nov. 9, p. 7). A 110-in. BHS corrugator will reportedly operate at the plant.