Orchids Paper in Pryor, Oklahoma, slates US$30.4M upgrade that will replace two paper machines with a new one, expanding mill's range of tissue products and boosting annual capacity 23%, to more than 70,000 tons; project to be completed by end of 2014
November 25, 2013
– Orchids Paper Products Company (NYSE MKT: TIS) 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:
Improved quality and manufacturing flexibility. The new paper machine will be capable of producing a broader range of paper grades that are utilized in value and premium tier products. It will replace two paper machines that produce paper utilized only in value tier products. This provides greater flexibility to the operation and allows for maximizing production output across all paper machines.
Increased capacity and lower production costs. The project is expected to increase the annual capacity of Orchids' paper mill from 57,000 tons to over 70,000 tons. Completion of the project will provide Orchids with sufficient paper to produce approximately 11 million cases of converted products annually. The new machine offers higher production rates and improved energy efficiency, thereby resulting in significantly lower production costs than the two machines being replaced.
Return to the shareholders. The combination of lower production costs and increasedcapacity is expected to increase annual EBITDA by approximately $6 million to $8 million once the project is complete.
SOURCE Orchids Paper Products Company