Auction holds key to SMART's future
By Chris Dumond
Staff Writer
HAMILTON — The future of SMART Papers could be set at auction this morning after nearly five months of bankruptcy.
As the deadline for preliminary bids passed at noon Monday, there was no word from company officials as to the outcome. Most in the industry, though, expect the paper company to purchased by an investment group if the auction is successful.
John O’Brien, the managing editor of trade magazine PaperAge, said purchase by another paper manufacturer is unlikely, but not impossible.
“In North America, everybody is so leery because the market is so flat right now. There’s no new demand coming on in the future, so everybody is trying to strip down as lean and mean as they can.” O’Brien said of manufacturing prospects. “Investment groups seem to be the only ones interested.”
Chris Peterson, professor of paper and chemical engineering at Miami University, said the most likely buyer would be a private equity group looking to buy the company for a bargain.
“The older parts of the industry are good places to buy production equipment greatly discounted,” Peterson said. “And the three paper machines still running there are making papers that people want to buy.”
Hamilton has seen both scenarios play out since 2000.
When Champion International sold its assets here, it found a buyer in fellow papermaker International Paper. However, IP turned around and sold the B Street mill to Sun Capital Partners, an investment group, creating SMART.
On the other hand, Mohawk Fine Papers’ 2005 purchase of International’s Beckett Mill on Dayton Street was a wise decision, company officials said.
Hamilton Mayor Don Ryan said city government leaders are pulling for a papermaker or someone connected to the forest and paper products industry to come out as the buyer. The most important outcome, though, is that the mill stays open and that the buyer retains the roughly 450 workers here.
Ryan estimated the city could take a $400,000 to $600,000 hit to its general fund from job losses at the plant, not including the ripple effect on those whose jobs support the mill operations.
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Contact this reporter at (513) 820-2025 or cdumond@coxohio.com.
