International Paper to boost investment in Alabama mill to $522.7 million

International Paper to boost investment in Alabama mill to $522.7 million
International Paper's Riverdale Mill in Dallas County will get an even bigger expansion than the company originally planned to keep up with the fast-growing market for packaging materials. (International Paper)

Memphis, Tennessee-based International Paper (IP) plans to increase its investment in its Riverdale Mill in Dallas County to $552.7 million as it optimizes the facility’s products and productivity.

In September 2017, IP announced plans to invest around $300 million at the Selma plant as part of a strategy to grow its industrial packaging business.

The additional investment expands on those plans to convert a line making uncoated freesheet, or copy paper, to the production of high-quality white-top and linerboard, as well as containerboard. These products are important to the packaging industry, which is experiencing a boom because of surging levels of e-commerce.

International Paper is investing $522.7 million in its Riverdale Mill in Selma, an increase from the $300 million investment announced last year. (contributed)

“Our system runs most effectively when there is flexibility, and this conversion will also help us define a more streamlined and balanced system overall,” Tim Nicholls, IP’s senior vice president, Industrial Packaging the Americas, said in September.

Wayne Vardaman, executive director of the Selma and Dallas County Economic Development Authority, recently briefed county leaders on the IP project, which will be supported by abatements of noneducational property and sales and use taxes.

“This is a tremendous investment in our community, and solidifies the presence of IP in Selma and Dallas County,” Vardaman said. “IP is Dallas County’s largest employer, with over 750 employees and numerous indirect jobs. These employees now know that the Riverdale Mill is here to stay.”

Dallas County officials said IP is making the largest industrial investment in the county in many years.

“This latest number floored us all,” Dallas County Probate Judge and Commission Chairman Kim Ballard said. “It’s the biggest investment in Dallas County that I remember.”

Alabama Reinvestment Act

Vince Perez, a project manager at the Alabama Department of Commerce, said the IP project is taking advantage of the Alabama Reinvestment Act, a new version of the traditional abatement act used on such projects. The new abatements are designed to assist companies reinvesting in a facility to prevent it from becoming a “legacy plant,” which ceases to get new investment and sheds jobs.

“This project is another indication of International Paper’s strong commitment to its Riverdale Mill and its workforce there,” said Greg Canfield, secretary of the Alabama Department of Commerce.

“It’s a great example of a company preserving its investment in a facility, and the jobs there, by pivoting output from one product to another that is in greater demand,” he added.

Vardaman said IP’s increased investment stems from discussions between local officials and company representatives.

“Since IP’s announcement in late September 2017, we have worked with local and corporate officials on the project, and we are extremely pleased with the increase in capital investment and the generosity of the company,” he said.

Vardaman said IP will donate $250,000 per year to the county for six years as an existing industrial development bond winds down and no taxes would be due. When the bond matures, the county will receive more than $5 million in education taxes annually. Once the abatement period ends, the county will receive even more money in noneducational property taxes, he added.

“Our work with IP proves our slogan, ‘When We Work Together, Together We Work,’” Vardaman said.

This story originally appeared on the Alabama Department of Commerce’s Made in Alabama website.

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