Three months after shuttering south Arkansas plants in Crossett and Hope, paper goods giant Georgia-Pacific (GP) will invest up to $70 million to upgrade its plywood and lumber operations in Gurdon to help sustain the more than 700 local jobs at the company’s facilities in Clark County.
“We are making state-of-the-art improvements that will transform our Gurdon facilities, greatly improving the utilization of raw materials and overall operating efficiencies, making jobs more meaningful, and turning us into an even stronger competitor,” said Mike White, the company’s western regional operations manager.
Company officials said the list of capital improvements will be significant, highlighted by the installation of an advanced packaging system; new panel assembly stations with state-of-the-art scanners; an upgraded power plant; and software and security enhancements. Work on the projects began earlier this summer and will be completed in 2020.
“This investment is validation of the work, commitment, and loyalty of our employees and the support Gurdon and Clark County have demonstrated for years,” said White, who started as an electrician at the plant when it was built in 1979. “And as any facility manager will tell you, the quality of the workforce is the critical factor for success. All the latest technology isn’t as important as having the caliber of competent, responsible, conscientious employees we have.”
The move by the Atlanta-based maker of such well known consumer products as Brawny paper towels, Dixie paper cups, and Quilted Northern toilet paper follows the June announcement by GP that it was shutting down its bleached board operations in Crossett by October, and closing two particleboard facilities in Hope and Monroeville, Ala., over the next couple months.
Concerning the Crossett downsizing, GP said it would permanently shut down the bleached board machines, as well as the extrusion plant, wood yard, pulp mill and a significant portion of the energy complex at the sprawling Crossett mill. The company said it would shut down another one of the mill’s older tissue machines in the Ashley County community in July that doesn’t support the long-term competitiveness of the tissue business.
Altogether, the shutdown of the Crossett facilities this fall will impact approximately 530 jobs and about 25 business and sales jobs that supported those operations. At the particle board plants in Hope and South Alabama, those facilities will put about 100 employees each on the unemployment rolls.
In August 2017, GP sold off its pine chemicals business in Crossett for $315 million to Ingevity, a publicly traded chemical manufacturer based in Charleston, S.C., that has more than 25 locations across the globe. That business still has about 70 employees, including sales and R&D employees in Atlanta and Decatur, Ga.
GP has said it will continue to operate and invest in the Crossett mill to support its consumer tissue and towel business, which employs about another 500 current employees. Just two years ago, GP employed 1,250 workers at its sprawling consumer productions manufacturing facility and paper mill in the south Arkansas town that manufactures tissue, paper and paperboard products for consumer and commercial use.
In Gurdon, however, company officials said GP’s ongoing investment will have a ripple economic effect in the southern Arkansas region, generating a $169 million overall impact, based on an economic analysis report by Dr. Gauri Guha, associated professor of economics at Arkansas State University in Jonesboro.
“Any large investment in an economic sector is amplified by regional economic multipliers due to direct, indirect and induced effects of the expenditures,” Dr. Guha said. “This means a direct investment of $70 million ends up generating an economic value of $169 million within the year.”
Along with the latest investment in the Gurdon operations, GP said it has invested more than $645 million in the past five years in its Arkansas operations. The company also said it will make its largest contribution ever to Gurdon and Clark County schools, committing $100,000 over five years to help install a multi-use playing field that will be used by the high school, as well as the middle and elementary schools and for community events.
GP has more than 30,000 employees at 180 locations across the globe. Founded in 1927, the former publicly-traded paper goods and lumber mill operator was acquired by multi-national conglomerate Koch Industries in 2005 for $13.2 billion. Koch is the second largest privately-held company behind Cargill Inc. with annual revenues exceeding $100 billion.