N. Charleston paper mill owner has record 3Q profit
The owner of the giant paper mill on the Cooper River reported a record profit Tuesday, as a large acquisition and a recent price increase offset manufacturing glitches in North Charleston and at another factory.
KapStone Paper and Packaging Corp, said it earned $18 million for the third quarter, up 13 percent from the same period of 2011.
Sales jumped 44 percent to $310 million, boosted by its acquisition one year ago today of U.S. Corrugated Inc.
Also, the bottom line was helped by KapStone’s recent $50 per-ton increase for containerboard, though prices are still $14 a ton less than what the company charged in the 2011 third quarter.
Roger W. Stone, chairman and chief executive officer, said KapStone mills turned out 389,000 tons of paper last quarter, less than anticipated.
He noted that the company’s facility in Roanoke Rapids, N.C., was flooded by a rainstorm in late August that led to a brief shutdown and unexpected cleanup and repair costs. “In addition, our Charleston mill also encountered some productivity problems which temporarily impacted ... operations,” Stone said in a statement.
He did not elaborate about the issues at the Cooper River site, saying only that it and the North Carolina mill are now performing well. Stone is scheduled to discuss the results in more detail during a conference call with stock analysts today.
KapStone recently approved a $29 million investment in new equipment and for related projects at its North Charleston mill.
The upgrades will improve the efficiency and capabilities of a paper machine known as “No. 3,” which KapStone said makes “ultra high-performance” grades of lightweight linerboard for manufacturers of corrugated cardboard. The 18-month project positions “us well for future customer needs,” Stone said Tuesday.
The No. 3 machine and two others at the local mill produce various grades of containerboard paper and specialty products that are used in boxes, flooring and laminates, such as Formica. The project is one of the first major investments that KapStone has announced for the 75-year-old North Charleston manufacturing facility in the four years since it bought the business from MeadWestvaco Corp. for $471 million.
Contact John McDermott at 937-5572.