Merger could be good for Kentucky, Missouri paper operations

A merger that turns two midsize U.S. paper and packaging companies into the dominant force in the coated-paper market involves a giant operation in the Tri-State area -- Westvaco Corporation, which has operations in Western Kentucky and Southeast Missouri.

Westvaco and Mead Paper Co. announced last week a merger agreement, creating a global company with a value of $10 billion and leading positions in markets for packaging, coated and specialty papers, consumer and office products and specialty chemicals.

The deal has been approved by the boards of both companies and is subject to shareholder and regulatory approval. The two companies expect the merger to close before the end of the year.

Westvaco Corporation, with headquarters in Stamford, Conn., is a leading producer of paperboard and value-added packaging for media, pharmaceutical and consumer markets, and is a major producer of coated papers and specialty chemicals. Westvaco's 2000 sales topped $3.68 billion, with net income of $245.9 million. Mead, with headquarters at Dayton, Ohio, had 200 sales of $4.3 billion and net income of $161.2 million.

Westvaco's Kentucky connection is a fine paper mill at Wickliffe, Ky., which employs 680 workers from Western Kentucky, Southeast Missouri and Southern Illinois. The company also purchases lumber from area farmers and loggers.

The merger should be good for the Wickliffe and Southeast Missouri operations, said Robert Crockett, a spokesman for Westvaco.

Westvaco, which started its paper-making operations at Wickliffe in a $90 million plant in 1970, has invested more than $240 million in expansions at Wickliffe over the past decade, including $125 million to install new facilities to enable the mill to produce high quality coated paper, and an $80 million expansion in 1995 for a carbon plant.

Westvaco's Southeast Missouri connection is more than 750 acres of cottonwood trees, being raised in Scott County under a "fertigation" process, in which the trees receive a steady amount of water and fertilizer around the clock.

These trees, some in their sixth year of growth, are rapidly approaching heights of more than 70 feet, and will be ready for harvesting soon. New trees are planted annually.

Another big announcement by Westvaco last week will add to the Wickliffe plant's manufacturing operations.

Westvaco is closing its Tyrone, Pa., mill, which is producing about 100,000 tons of coated and uncoated papers a year. The company expects to end operations at the Tyrone mill by the end of October.

Evaluation of the Tyrone operations started before merger talks with Mead. The mill's coated paper production will most likely be transferred to Westvaco's coated paper mills in Luke, Md., and Wickliffe, Ky., though some of the output may be absorbed at Mead paper mills.

Under the deal, Mead shareholders will own 50.2 percent of the new company and will receive one share in MeadWestvaco for each Mead share, plus $1.20 per share when the deal is completed. Westvaco shareholders will own 49.8 percent of the new company and will receive 0.97 share for each share held.

Good employment news

Emerson Electric Co. has plans to hire 200 additional workers over the next year in its Southeast Missouri plant at Kennett, Mo.

Ron Randen, manager of the Emerson Electric plant in Kennett, announced the plans for new hires during a recent meeting with Missouri Lt. Gov. Joe Maxwell and Kennett community leaders.

Employment growth has stalled throughout the area, state and nation, and, consistent with a slowing economy, the unemployment rate has risen, although modestly to date.

But there's some good news on the employment scene in Southeast Missouri this fall and winter.

That's the finding of Manpower Inc., which issues quarterly Employment Outlook Surveys for the area.

The latest survey reveals that 40 percent of companies contacted in Southeast Missouri may be hiring more people for the October-December period, while 7 percent are preparing for fewer personnel, with 50 percent to maintain current staffing levels.

Statewide, only 26 percent of the companies contacted are looking to increase employment, and nationally, about 24 percent plan further expansion.

But the report is not all positive. Statewide, as many as 10 percent of the companies do plan reductions. Nationally, that figure climbs to 11 percent.

Manpower Inc., which has an office in Cape Girardeau, has been a significant indicator of employment trends during its 25-year history.

Surveys are based on telephone interviews with more than 16,000 public and private employers in 485 U.S. markets, including Southeast Missouri.

Manpower is a leader in the staffing industry, providing workforce management services. The company annually provides employment to more than 2.7 million people worldwide.

More work for plant

The closing of an Arvin Industries plant in Fayette, Ala., could result in more work at the Dexter, Mo., Arvin plant.

Arvin officials said that work previously done in Fayette will be sent to plants in Dexter, Franklin, Ind., and Columbus, Ind.,

Arvin, a manufacturer of mufflers and tailpipes, employs about 550 workers at Dexter.

The Fayette plant employed about 300 workers.

Hot mall item

The Gap has started construction at University Mall in Carbondale, Ill.

The Gap will occupy an 8,111-square-foot retail space in the mall, where Gap, BabyGap and GapKids will be located. The new store will be adjacent to Garfield's Restaurant and Pub in the Famous-Barr section of University Mall.

The Gap, with headquarters in San Francisco, offers clothing, accessories and personal-care products for men, women, children and infants.

The Gap is on the "want list" of Westfield Shoppingtown West Park at Cape Girardeau.

Other names on the list here include Abercrombie & Fitch LTD, a clothing store; The Disney Store; Old Navy; and Metabolife, a weight-loss product store.

Westfield Shoppingtown is also looking for a third anchor store to replace ShopKo, which closed earlier this year.

B. Ray Owen is the business editor of the Southeast Missourian.