SierraPine's Medford fiberboard plant sold
SierraPine's medium-density fiberboard plant, with roots tracing back to Medford Corp.'s glory days, will soon have a new owner.
Flakeboard America Ltd. said it will buy three SierraPine particleboard plants, including its Medford plant on North Pacific Highway.
SierraPine plants in Springfield and Martell, Calif., also are part of the deal, while an Adel, Ga., mill will be closed, said President Jeff Johnson, whose office is in Roseville, Calif.
Santiago, Chile-based Arauco acquired Flakeboard Co. in 2012. Once the SierraPine mills are incorporated into the Arauco system, it will have annual production capacity of 2 billion square feet.
The Medford plant employs approximately 130 workers on four shifts, said Doug Houston, SierraPine's local manager.
He said the plant has run 24 hours, seven days a week, save for a period during the recession when it cut back to three shifts. It returned to full operation in August 2012.
The plant opened as a division of Medco in 1975 before it was sold to Texas billionaire Harold Simmons' Valhi Inc. in 1984. In the mid-1990s, Valhi sold the medium-density fiberboard company, which had been renamed Medite, to SierraPine, a California limited partnership including Timber Products Co. and SierraPacific Industries of Redding, Calif., for $39 million.
Simmons, who exited the local timber scene in the 1990s, died Dec. 28 at the age of 82.
"SierraPine will work closely with Flakeboard to ensure a smooth transition of these facilities to the new ownership group," Johnson said in a statement. "In the meantime, we will continue to conduct business in the same manner as our customers have come to expect."
SierraPine and Flakeboard expect the deal to close by the end of March.
A spokesperson for Flakeboard said the three plants will push the panel maker's work force to more than 1,000. The company bought three medium-density fiberboard and three particleboard mills from Weyerhaeuser Corp., in 2006, including plants in Albany and Eugene.
Arauco reported sales of $1.3 billion during the third quarter of 2013, a 1.7 percent drop from the previous year as its two largest divisions — pulp and panels — declined 3 percent and 2.5 percent, respectively. The company's profit of $117 million for the quarter was off 28 percent as well.
Between 2005 and 2011, Arauco, which also operates in Argentina, Brazil and Uruguay, saw revenue climb from $2.37 billion to $4.38 billion. Net income topped out at $701 million in 2010.
The company spent more than $1 billion in 2011 and 2012 on capital projects, but pulled back in 2013.
Reach reporter Greg Stiles at 541-776-4463 or email@example.com. Follow him on Twitter @GregMTBusiness, friend him on Facebook and read his blog at www.mailtribune.com/EconomicEdge.