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New direction: New jobs
2 Jun 2015
CALHOUN - A "new strategy" and "new direction" equals a new product and new jobs at Resolute Forest Products of Calhoun.
Resolute announced plans for expansion into the "multi-billion-dollar tissue business" on Monday with its investment of $270 million to create a new, state-of-the-art facility to manufacture premium bath tissue for the growing private label market.
The project will add an additional 105 jobs to the Calhoun facility - which currently employees approximately 550 people - when it becomes operational in the first quarter of 2017.
"The demand for private label tissue has increased - it has been chipping away at market share from the branded products - and with the need for premium quality, we feel we'll be successful with this project," said Resolute Forest Products President and CEO Richard Garneau during a press conference at the Calhoun plant Monday afternoon. "It's a big day for Resolute and a big day for this mill. We have a new strategy, new direction as we enter the multi-billion-dollar tissue business. It's a new chapter in the story of this mill."
Resolute's previous $105 million investment in a modern continuous pulp digester and other wood chip processing equipment made Monday's announcement possible, according to Garneau.
"Softness, absorption and strength in tissue are better with virgin pulp versus recycled products. We have hardwood and softwood here, and the combination of the two pulps at this site will provide all the requirements to optimize our product," Garneau said. "The quality of the pulp from the new digester will allow us to break into the market."
In addition to having "premium quality pulp" at the Calhoun site, Garneau said Calhoun also had existing space that could house the equipment needed to process tissue.
"If you look at the last ten years, there have been significant improvements made in the manufacturing of tissue that will give an advantage to this site. The technology has changed in ways to improve the strength, absorption and smoothness of tissue," Garneau said. "The machinery now allows for a capacity of 60,000 tons of product per year - that's millions of cases. Look at a few years ago and the technology only allowed for 15- to 20,000 tons per year, so now we have three times more productivity."
The Calhoun site will also house its own converting facility, which will pack, case or bundle products depending on each contract's specifications.
"This will be our first time selling product from Calhoun directly to the consumer market," Garneau said. "Calhoun's location makes it ideal for tapping into both Northeastern and Southeastern markets."
The hiring process for the tissue facility will begin within the month for the project team, according to Calhoun Plant Manager Rob Martin.
"Over the next two years, employment will increase until we hit 105," Martin said. "Training will be significant for the machinery and conversion lines, as well as maintenance. That will ramp up before we start the machines."
That is expected to begin in 2017, with the new digester planned to begin operation by the end of this year.
Garneau thanked stakeholders for their part in the project.
"We appreciate the support of our workforce and the support of union leaders locally and nationally - that's a very good relationship. And, we have another 105 positions made possible because of the investment climate in Tennessee. The governor and commissioner of economic development were very open and welcoming. We also worked with the mayors of McMinn and Bradley counties, and we appreciate the communities for their support," Garneau said. "We have the environment and ideal conditions here to supply product."
McMinn County Economic Development Authority Executive Director Kathy Price said the announcement signals a turnaround for the Calhoun plant.
"Things were looking bleak two years ago when Resolute Forest Products stopped producing newsprint at the Calhoun mill. However, the leadership team at the Calhoun mill saw the need to diversify its product mix. This vision has enabled them to successfully secure capital from the corporate team to do this expansion and the previously announced expansion from a little over a year ago," Price said. "We are thankful that Resolute Forest Products' board of directors and corporate team see value in the Calhoun mill. We look forward to working with them for many years to come."