ANALYSTS ON BOTH SIDES OF THE DEBATE OVER WHETHER OR NOT RJR NABISCO SHOULD SPIN OFF ITS CIGARETTE HOLDINGS INTO A SEPARATE COMPANY SHOULD BE INTERESTED IN THE FIRST QUARTER REPORTS OF SCHWEITZER-MAUDUIT, AN ATLANTA-BASED SUPPLIER OF FINE PAPERS TO THE TOBACCO INDUSTRY. THE COMPANY IS THE PRODUCT OF A SIMILAR SPIN-OFF FROM KIMBERLY-CLARK CORP. ON DEC. 1, 1995, AND WILL PUBLISH A REPORT OF ITS FIRST INDEPENDENT FINANCIAL QUARTER IN MID-TO-LATE APRIL, SAID BILL FOUST, THE NEW COMPANY’S VICE PRESIDENT OF ADMINISTRATION.
AN INFORMATION REPORT SENT TO KIMBERLY-CLARK STOCKHOLDERS CITED AS REASONS FOR THE SPIN-OFF TWO OF THE STRONGEST ARGUMENTS BY SUPPORTERS OF AN RJR SPLIT: INCOMPATIBLE FINANCIAL, INVESTMENT AND OPERATING CHARACTERISTICS OF THE TWO BUSINESSES, AND FEAR THAT ADVERSE PUBLICITY AND LAWSUITS AGAINST THE TOBACCO INDUSTRY COULD HARM OTHER ASPECTS OF THE COMPANY’S BUSINESS. RJR’S MANAGEMENT, HOWEVER, REFUTES THESE CLAIMS.
WITH OPERATIONS IN THE U.S., CANADA AND FRANCE, AN ESTIMATED 57% SHARE OF THE U.S. CIGARETTE PAPER MARKET AND 1995 SALES OF $462.9 MILLION IN MORE THAN 80 COUNTRIES, SCHWEITZER-MAUDUIT HAS A STRONG BASE FROM WHICH TO BEGIN ITS EXISTENCE AS AN INDEPENDENT COMPANY.
MR. FOUST TOLD GLOBALFAX THAT “OVER 90%” OF THE COMPANY’S PRODUCTS GO TO THE TOBACCO INDUSTRY, WHICH IS GROWING AT A RATE OF 5-6% ANNUALLY OUTSIDE OF THE U.S. THE CIGARETTE MANUFACTURER PHILIP MORRIS INC. ACCOUNTED FOR ABOUT 35% OF SCHWEITZER-MAUDUIT’S SALES IN 1994.
ALTHOUGH THE COMPANY IS ONLY A SUPPLIER TO THE CIGARETTE MANUFACTURERS AND NOT AS LIKELY AS ITS CLIENTS TO BE HIT BY A LAWSUIT, A MAJOR SETTLEMENT AGAINST ONE OF ITS CUSTOMERS COULD HAVE A SIGNIFICANT IMPACT ON ITS FINANCIAL SITUATION, ACCORDING TO THE STOCKHOLDERS’ INFORMATION REPORT.
NON-TOBACCO-RELATED PRODUCTS INCLUDE DRINKING STRAW WRAP, LIGHTWEIGHT PRINTING PAPERS, TEA BAG, COFFEE AND OTHER FILTER PAPERS, BATTERY SEPARATOR PAPER AND SPECIALIZED INDUSTRIAL PAPERS.
FOR MORE INFORMATION CALL MR. FOUST AT (770) 569-4203.
BY BRIANA PEHLMAN