Orchids Paper to automate converting

Pryor, OK-based Orchids Paper Products Company said its board of directors has approved a capital project to automate certain processes in its converting operations totaling about $4.75 million in fiscal year 2008. In conjunction with this project, Orchids amended its credit facility to increase capital expenditures allowable in 2008 under the facility and to increase the limit of the revolving credit facility.

The converting automation project will involve the purchase and installation of case packers, conveyors and case unitizing equipment, which will reduce the amount of manual labor required in the operation. No equipment suppliers were named in the announcement.

Equipment installation will begin in 2Q08. The project is expected to be completed by 4Q08. The Company will finance the project with a combination of cash generated from operations and borrowings under the revolving credit facility.

www.orchidspaper.com.

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