MEDITE, the fibreboard manufacturing plant in Clonmel which employs 210 people, is to be sold by its American parent company, Valhi to another US company, Williamette Industries Inc. The disposal of Medite Ireland is part of a complex $230 million (£144 million) deal under which Medite Corporation, a wholly owned subsidiary of Valhi, will sell forestry plantations and timber plant to a number of other US based corporations.
The only plant being disposed of outside of the US is the Clonmel plant. The transfer of ownership will not result in any job losses in Ireland, according to Williamette.
Letters of intent have been signed by Valhi with Williamette, but final details of the transaction will not be disclosed until after the sale is completed. The disposal of Medite assets by Valhi appears to be in large part aimed at clearing the Medite bank debt in the US and realising some of the corporation's assets.
If it is successful Valhi expects to realise 553 million in cash after debts are disposed of. Part of the deal by which Williamette will acquire the Clonmel plant is that it will assume responsibility for the plant's debts, believed to be around $20 million.
Williamette is the largest manufacturer of medium density fibreboard (MDF) in the United States. The Clonmel plant is one of the largest MDF producers in Europe. Williamette's chief executive officer, Mr Steve Rogl, said the acquisition of Medite will provide the company with an opportunity to expand into the European market.
"The Clonmel plant has an adequate fibre supply, an excellent workforce and a superb repustation for quality production," he said. "Its European sales arm will help provide markets for our recently expanded domestic production as well. It is an excellent choice for Williamette's first offshore manufacturing venture."
Medite of Europe Ltd managing director, Mr Rory Kirwan, said about 84 per cent of the Irish production of 300,000 cubic metres a year is exported. The acquisition by Williamette would create a strategic alliance between two of the main companies in the MDF industry, "expanding the global presence in the MDF industry of both companies".
The European market for fibreboard has grown from 100,000 cubic metres a year in 1983 to 4.8 million cubic metres last year. This represents an average annual growth rate of 15 per cent.
The Medite plant opened in Clonmel in 1983. It received state grants worth £6 million between 1983 and 1993.
The bulk of the assets being disposed of by Valhi involve Medite Corporation assets in the US. It proposes selling 170,000 acres of timberlands to Rogue Resources, an Oregon based partnership of forest product operators.
A Medford Oregon plant producing medium density fibreboard, along with a veneer and sawmill facility is being sold to Sierra Pine, a California based partnership.
Williamette, which is acquiring the Clonmel plant, has 96 plants in 21 states and employs 13,000 people. It had net sales in the US of $3.9 billion.
