2 INDUSTRY NEWS
Merger will create $16bn global corrugated giant
A
new global leader in the manufacture of consumer and corrugated packaging
with yearly sales of US$15.7 billion will be created with the expected merger of US-based firms Rock-Tenn Company (RockTenn) and MeadWestvaco Corporation (MWV). The two companies agreed in January to the merger in which MWV shareholders will own 50.1 percent. This will favour the previously-announced spin off of the MWV Speciality Chemicals division after the formation of the new business, which will have an equity value of about $16bn and pre-tax profits of almost $3bn. With 26,000 employees, most
of RockTenn’s operations in the US, but also has facilities in Canada, Mexico, Chile, Argentina and China. Sales for
the year ending last September were $9.9bn. MeadWestvaco, with sales of $5.4bn a year in 2013, has 16,000 employees and operations in 30 countries. Cost savings of about $300m
are expected to be made in the first three years after the merger. Steven Voorhees, chief
executive of RockTenn and who will be chief executive and president of the yet-to-be- named new company based in Richmond, Virginia, said, “This transaction brings together two highly complementary organizations to create a new, more powerful company with leadership positions in the global consumer and corrugated packaging markets. “This is a terrific opportunity
for shareholders, employees and customers of both companies, all of whom stand
to benefit enormously from the combination. Importantly, our two companies are also an exceptional cultural fit, sharing a commitment to exceeding customer expectations and a focus on developing innovative packaging solutions. Planning for the integration of these two companies has already started and we expect to expeditiously realize the full value of cost synergies we have identified.” John Luke Jr, chief executive of MWV, added, “We are creating the leading global provider of consumer and corrugated packaging solutions – and generating significant value for both companies’ shareholders. This transaction is a logical step that is borne of our strategic progress and financial success, and it offers MWV shareholders both immediate value and the opportunity to participate in
Pulp Paper & Logistics
Steven Voorhees
significant upside as the new company generates substantial growth from its market-focused global strategy.” Luke will become non-
executive chairman of the new company’s board. The company will have its operational base in Norcross, Georgia, formerly the MWV headquarters. The deal is expected to be closed in the second quarter of his year.
British paper firm fined after reel accident
The hazards of handling heavy paper reels were highlighted when a UK paper trading, converting and sales company was fined £13,500 after a worker suffered multiple injuries in an accident. The 45 year-old worker was helping to load the reel onto a container at Aspenlink’s premises in Essex. A court heard that in 2013 the man, who was in the container, was hit by the reel after it was released by a forklift truck, trapping him between the
January/February 2015
reel and the bulkhead of the container. He sustained a double fracture
to his pelvis, as well as internal injuries, remaining in hospital for almost a month. He has had to undergo a series of operations, and has only recently returned to work. The incident was investigated
by the Health and Safety Executive (HSE) which found the company had failed to act on advice from its own safety consultants for three consecutive years from 2010. Aspenlink was
advised of the need to carry out a proper risk assessment and introduce a safe system of work for loading paper reels. Aspenlink Ltd, based St Albans,
was fined £ 13,500 and ordered to pay £1,200 in costs after pleading guilty to a breach of the Health and Safety at Work Act 1974. After the hearing, HSE Inspector Keith Waller said: “This was an entirely avoidable incident. The dangers associated with paper reels, in particular the risks associated with their
loading and unloading, are well-known in the industry and entirely foreseeable. “Aspenlink was first made aware of the numerous shortcomings in its management of health and safety by its own health and safety consultant in 2010 – some three years before the incident – but it failed to act on this advice. “The company should have
carried out proper assessment of the risks facing workers. Instead, it waited for an employee to be seriously injured before taking any action.”
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