Clearwater Paper to Invest $23 Million in Shelby, N.C. New State-of-the-Art Facial Tissue Line

Rhea-AI Summary

Clearwater Paper (NYSE: CLW) will invest $23 million in a state-of-the-art facial tissue converting line at its Shelby, North Carolina facility. This 400-acre site, which already produces private-branded bathroom tissue, paper towels, napkins, and facial tissue, employs over 600 people. The investment aims to meet rising customer demand, optimize operational efficiency, and maintain high-quality standards. The decision to expand in Shelby is influenced by its strategic location, skilled labor availability, and strong community relationships.

Positive

• Clearwater Paper's $23 million investment in new facial tissue line.
• Enhancement of Shelby, NC facility's production capabilities.
• Proximity to customers for quicker distribution.
• Utilization of growing local skilled workforce.
• Positive relationships with local government and community.

Negative

• None.

Insights

Financial Analyst

Clearwater Paper's $23 million investment in a new facial tissue line at its Shelby, North Carolina facility signals a significant strategic move. Analyzing this from a financial perspective reveals several key insights. Firstly, the substantial capital expenditure indicates a bet on increased consumer demand and a potential market share expansion in the private-branded tissue sector. This could lead to enhanced revenues and profitability over the long term.

In the short term, however, such investments may slightly squeeze the company's cash flow and increase its capital expenditure. Investors should monitor how this project is funded—whether through existing cash reserves, debt, or equity—to gauge the impact on Clearwater Paper's balance sheet. Moreover, metrics like return on investment (ROI) and payback period will be critical to assess the project's financial viability.

Moreover, positioning the new line in Shelby could reduce logistical costs due to proximity to key markets, positively affecting operating margins. Additionally, leveraging an already established facility with a skilled workforce may mitigate some risks associated with greenfield projects.

Market Research Analyst

From a market research standpoint, Clearwater Paper's expansion aligns with ongoing trends in consumer preferences for private-branded products. The tissue market has seen steady growth, driven by population increases and heightened hygiene awareness. This investment suggests that Clearwater Paper is positioning itself to capitalize on these trends, possibly gaining a competitive edge over rivals.

Furthermore, the decision to expand in Shelby, a site with a strong local workforce and an advantageous geographical location, speaks to the company's strategy of optimizing its supply chain efficiency. This move could lead to faster turnaround times and better customer service, reinforcing client relationships and potentially increasing market share.

However, it is worth considering potential market saturation and competition from other private-branded and branded tissue manufacturers. Investors should watch for any signs of overcapacity or aggressive pricing strategies from competitors, which could impact Clearwater's market positioning.

SPOKANE, Wash.--(BUSINESS WIRE)-- Clearwater Paper Corporation (NYSE: CLW), a leading supplier of private-branded tissue, announced today it will invest $23 million in a new, state-of-the-art facial tissue converting line at its Shelby, North Carolina consumer products facility. Clearwater Paper's Shelby Mill manufactures high-quality private branded bathroom tissue, paper towels, napkins, and facial tissue. The 400-acre facility employs more than 600 people.

"Clearwater Paper selected Shelby for its newest facial tissue line due to its proximity to our customers, a growing local skilled workforce, and a history of excellent working relationships with the City of Shelby, Cleveland County and the State of North Carolina," said Clearwater Paper's senior vice president of consumer products, Michael Urlick. "Our investment in a new facial line will enable us to meet growing customer demand, further optimize our network and continue to deliver outstanding quality and service to our customers."

ABOUT CLEARWATER PAPER

Clearwater Paper is a premier supplier of private brand tissue to major retailers, including grocery, club, mass merchants, and discount stores. In addition, the company produces paperboard used by quality-conscious printers and packaging converters, and offers services that include custom sheeting, slitting, and cutting. Clearwater Paper's employees build shareholder value by developing strong relationships through quality and service. For more information on Clearwater Paper, please visit our website at www.clearwaterpaper.com.

FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including statements regarding the impact of new equipment on operations at the company’s Shelby facility, customer demand and overall network; customer demand; and investments by the company in its facilities and employees. These forward-looking statements are based on current expectations that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include those risks and uncertainties described in the company’s Annual Report on Form 10-K for the year ended December 31, 2023, and other risks and uncertainties described from time to time in the company’s other public filings with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this press release and the company does not undertake to update any forward-looking statements based on new developments or changes in the company’s expectations after the date of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240620315450/en/

Investor contact:

Sloan Bohlen

Solebury Strategic Communications

509.344.5906

investorinfo@clearwaterpaper.com

Media contact:

Julia Joy

Clearwater Paper Corporation

509.344.5953

julia.joy@clearwaterpaper.com

Source: Clearwater Paper Corporation

FAQ

What is Clearwater Paper's recent investment in Shelby, NC?

Clearwater Paper is investing $23 million in a new facial tissue converting line at its Shelby, NC facility.

Why did Clearwater Paper choose Shelby, NC for its new investment?

Shelby was selected due to its proximity to customers, a skilled local workforce, and strong relationships with local authorities.

What products are manufactured at Clearwater Paper's Shelby facility?

The facility produces private-branded bathroom tissue, paper towels, napkins, and facial tissue.

How many people does the Shelby, NC facility employ?

The Shelby facility employs more than 600 people.

What is the stock symbol for Clearwater Paper?

The stock symbol for Clearwater Paper is CLW.