Plywood mill draws second bidder.

Byline: Sherri Buri McDonald The Register-Guard

Just when the 280 employees at Georgia-Pacific's hardwood plywood mill in Eugene got used to the idea that a private conglomerate planned to buy all of Georgia-Pacific Corp.'s operations, another bidder for the Prairie Road plant has come to the fore.

Earlier this month, private conglomerate Koch (pronounced coke) Industries made a $13.2 billion bid to buy all of Georgia-Pacific's oper- ations, including the plywood plant, Georgia-Pacific's 35-employee resin plant on Highway 99 and a warehouse on Irving Road.

Koch Industries has agreed to pay $48 for each Georgia-Pacific share - a 39 percent premium to the company's closing stock price on Nov. 11.

The publicly traded Georgia-Pacific, known by consumers for its Brawny paper towels and Quilted Northern bathroom tissue, would become an independent subsidiary of privately held Koch Industries.

It's possible that the transaction could close later this year, or early next year, depending on the timing of regulatory approvals and the progress of the tender offer, Koch spokeswoman Mary Beth Jarvis said.

But on Wednesday, John Murphy, owner of Sutherlin-based Murphy Plywood, announced his intent to buy the Eugene plywood mill, and to start operations there under the Murphy name in January.

Georgia-Pacific spokesman James Malone confirmed Wednesday that Murphy has inquired about buying the Eugene plywood mill.

However, Malone said, "Nothing's definite."

If a sale to Murphy moves forward, Georgia-Pacific employees could apply next month for roughly 250 positions with Murphy Plywood, Murphy said.

"They'd be considered like all employees that would apply," he said.

But the Georgia-Pacific workers would have a leg up on the competition, he suggested.

"That's a hardwood specialty mill, so I'd say they have an inside track because of their knowledge of the facility and skill sets," Murphy said.

Murphy's 270-employee plywood mill in Sutherlin has been shuttered since a fire destroyed the plant on July 5.

Acquiring the Eugene mill would be "an expansion step for us," Murphy said. "It does not preclude us from rebuilding (a mill) in Sutherlin," he said.

About 30 people in administrative and engineering jobs have continued working at Murphy Plywood in Sutherlin after the fire, Murphy said.

He estimated that 95 to 110 employees of the mill's 270-employee workforce have found jobs with other employers.

Former Sutherlin mill workers are free to apply for jobs in Eugene, but Murphy said he doubts that many will.

"That's a long drive for a lot of people," he said.

While the future for the employees at Georgia-Pacific's Eugene plywood mill is uncertain, the 35 working at Georgia-Pacific's Eugene resins plant appear to be heading into a new era under Koch ownership.

Koch, based in Wichita, Kan., is the nation's second largest private company, with annual revenues of $60 billion.

With the acquisition of Georgia-Pacific, it would climb to the No. 1 spot, overtaking Cargill.

Georgia-Pacific would add a forest products arm to Koch, which manufactures, ships and trades petroleum, chemicals, asphalt, gas liquids and other energy products.

Rod Smith, assistant manager at the Eugene resins plant, said it's too early to know what changes might take place under Koch ownership.

"Koch has no specific plans for any of the Georgia-Pacific businesses," said Jarvis, the Koch spokeswoman.

After the transaction is completed, "Georgia-Pacific will continue to operate as an independent company with its own board of directors and management," she said. "They'll make the decisions about Georgia-Pacific's business."

Eugene-based timber analyst Paul Ehinger said Koch is a very successful, family-owned business.

"They didn't get to be the second largest private corporation in the country by doing things wrong," he said.

"I would say the chance of (Koch) continuing to operate most of the (local Georgia-Pacific) facilities is somewhere between good and excellent," Ehinger said.

Georgia-Pacific shares closed at $47.15 on Wednesday, which was down a penny from Tuesday.