International Paper (IP) plans to increase a planned investment in its Riverdale Mill in Selma, AL to $552.7 million as it optimizes the facility’s product mix and boosts productivity. In September 2017, Tennessee-based IP announced plans to invest approximately $300 million at the Dallas County plant as part of a strategic plan 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 whitetop and kraft linerboard, as well as containerboard. These products are important to the packaging industry, which is experiencing a boom due to surging levels of e-commerce.
“Our system runs most effectively when there is flexibility, and this conversion will also help us define a more streamlined and balanced system overall,” explained Tim Nicholls, IP’s senior vice president, Industrial Packaging the Americas, last September.
Selma and Dallas County Economic Development Authority Executive Director Wayne Vardaman recently briefed county leaders on the IP project, which will be supported by abatements of non-educational 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,” said Vardaman. “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.”
IP is making the largest industrial investment in the county in many years, according to Dallas County officials. “This latest number floored us all,” Dallas County Probate Judge and Commission Chairman said Kim Ballard. “It’s the biggest investment in Dallas County that I remember.”
The IP project is taking advantage of the Alabama Reinvestment Act, a new version of the traditional abatement act used on projects, according to Vince Perez, a project manager at the Alabama Department of Commerce. The new abatements are designed to assist companies reinvesting in a facility 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.”
IP’s increased investment stems from discussions between local officials and company representatives, according to Vardaman. “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.”
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 over $5 million in education taxes annually. Once the abatement period ends, the county will receive even more money in non-educational property taxes, according to Vardaman. “Our work with IP proves our slogan, ‘When We Work Together, Together We Work,’” he said.
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