Buckeye Announces Closure of Glueckstadt, Germany Manufacturing Facili

    Business Editors

    MEMPHIS, Tenn.--(BUSINESS WIRE)--Jan. 11, 2005--Buckeye Technologies Inc. (NYSE:BKI) today announced that it will discontinue producing cotton linter pulp at its Glueckstadt, Germany facility in the fourth quarter of calendar year 2005. The Company will continue to meet the needs of its customers by sourcing products currently produced at Glueckstadt from its facilities in Memphis, Tennessee and Americana, Brazil.
    Buckeye Chairman David B. Ferraro stated, "Although cotton linter pulp is an important part of Buckeye's specialty pulp business, we can no longer economically justify operating this high fixed cost facility which has seen its economic position deteriorate considerably from the large rise in the Euro over the past two years.
    "We believe we can retain most of the volume currently produced at Glueckstadt by more completely utilizing our Memphis facility, which recently has been running at about eighty percent of capacity, and bringing the Americana facility, which will have market capability by the fall of 2005, to near capacity levels on an accelerated schedule. We are confident that lower manufacturing costs at these locations will help us serve the market better and generate future growth. Transferring Glueckstadt production to other facilities will enable us to improve our operating results by about $9 million annually and reduce working capital needs by about $6 million. We expect to fully realize these benefits by calendar year 2006."
    Mr. Ferraro further stated, "It is extremely unfortunate that economic conditions require the closure of the Glueckstadt facility and termination of approximately 100 dedicated employees. The Company will incur restructuring costs, including employee termination expenses, estimated to be approximately $10 million. Additionally, we will include a non-cash asset impairment charge relating to the Glueckstadt facility of about $7 million after tax in our October-December 2004 financial results."
    Buckeye has scheduled a conference call for January 12, 2005, 9:30 a.m. CST to further discuss the Glueckstadt plant closure. All interested parties are invited to dial in at 800-289-0518 (U.S.) or 913-981-5532 (International).
    Buckeye, a leading manufacturer and marketer of specialty fibers and nonwoven materials, is headquartered in Memphis, Tennessee, USA. The Company currently operates facilities in the United States, Germany, Canada, and Brazil. Its products are sold worldwide to makers of consumer and industrial goods.
    Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities laws that involve risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting the Company's operations, financing, markets, products, services and prices, and other factors. For further information on factors which could impact the Company and the statements contained herein, please refer to public filings with the Securities and Exchange Commission.

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CONTACT: Buckeye Technologies Inc. Kris Matula, 901-320-8588 or Chad Foreman, 901-320-8828 Website: www.bkitech.com

KEYWORD: TENNESSEE GERMANY INTERNATIONAL EUROPE INDUSTRY KEYWORD: CHEMICALS/PLASTICS FOREST PRODUCTS MANUFACTURING CONFERENCE CALLS SOURCE: Buckeye Technologies Inc.

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