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Blue Ridge shows profit

By Michael Beadle

Profits are up for Blue Ridge Paper Products nearly two years after devastating floods washed through the Canton paper mill, causing $7 million in damages and temporarily shutting down production.

Last week, Blue Ridge Paper reported $2 million in second quarter profits after listing $2.9 million in losses for the first quarter of the year and $4.4 million in losses for the second quarter of 2005.

Total net sales for the second quarter (April 1-June 30) were $144.9 million. First quarter sales were $140.1 million.

Richard Lozyniak, president and chief executive officer of Blue Ridge Paper Products, praised employee productivity for helping improve the company’s bottom line.

According to the company’s latest report, the first half of the year included two record-breaking months for production. In fact, the total amounts of coated and uncoated board, paper, and pulp produced per day by Blue Ridge Paper are all higher than any year this decade, the report stated.

Blue Ridge Paper’s employees agreed to a three-year contract in July that includes 3 to 4 percent pay raises and sing-digit percentage bonuses for making improvements in safety, productivity, environmental health, and quality. The bonus plans were developed by employee teams.

Streamlining mill operations and completing renovations at the Canton mill — thanks in part to $5 million in state and federal flood relief aid — have helped to create a lean, mean machine, according to Lozyniak.

“It’s really our employees working smarter, not harder,” Lozyniak said.

While the profit report came as welcome news, the rising cost of oil has also meant higher transportation expenses in shipping paper and cardboard. However, the price of paper per ton is also at its highest level since 1996.

Lozyniak sounded bullish about Blue Ridge Paper’s expanding market, which includes customers in Russia, Europe and Panama. The company exports about 50,000 to 60,000 tons of cups and milk carton stock — about 10 percent of its sales — out of the country.

“Demand for our company has never been an issue,” Lozyniak said. “We see our markets being pretty strong.”

Blue Ridge Paper is one of the largest manufacturers in Western North Carolina with 1,200 employees at its Canton mill and Waynesville plant. Blue Ridge Paper also runs plants in Athens, Ga., Richmond, Va., Olmstead Falls, Ohio, and Clinton, Iowa. The company’s products include envelopes, milk and juice cartons, paper cups, and specialty papers.

Blue Ridge Paper formed in 1999 after being sold by Champion International. Investors from KPS and GE Capital own 55 percent of Blue Ridge’s stock. The Blue Ridge employees own 40 percent of the stock through an employee stock ownership plan (ESOP) and the remaining 5 percent is reserved for senior Blue Ridge executives.

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