Coillte, the State-owned forestry company, announced yesterday that it had purchased the Weyerhaeuser Europe plant in Clonmel for an undisclosed sum.
Gerry Egan, company secretary with Coillte, said yesterday that the company did not expect any redundancies among the US group's 200-strong workforce to result from the takeover of the medium-density fibreboard (MDF) plant.
"We envisage that the business will be run as a going concern," he said. "We don't envisage any major changes."
The takeover will provide a very important platform for the development of Coillte, Mr Egan said. "There are two kinds of synergies. The first is because [ the plant] is using wood as its main raw material, and Coillte is the largest producer of wood in the State."
In addition, Coillte already owns a wood panel business, SmartPly, in Waterford, which it acquired from US company Louisiana Pacific in 2002. The Waterford plant manufactures oriented strand board (OSB). "We would see MDF and OSB as being very complementary products."
Mr Egan anticipates that the takeover will greatly strengthen Coillte's position in the wood panels market in general, and in the UK in particular.
"Coillte has already established a good position in the OSB market through SmartPly," he said, adding that the purchase "opens up all sort of interesting opportunities down the line".
The purchase is currently pending approval from the Competition Authority, which Mr Egan says could take between one to four months.
The first steps in the transaction were taken in November last year when Weyerhaeuser Europe's US-based parent company, Weyerhaeuser, announced its intention to exit the composite panel sector, and placed all seven of its manufacturing plants on the market.
At the time, chief executive Steven Rogel said: "We believe that the skilled employees at these highly competitive and efficient mills will provide greater value for a new owner who is more focused on this line of business products."
Weyerhaeuser Europe made an operating profit of €3.45 million in 2004 on sales of €74 million, mostly in the UK market.
