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JAMES RIVER AND ENRON FORM STRATEGIC ENERGY ALLIANCE
FOR IMMEDIATE RELEASE: Wednesday, June 25, 1997
HOUSTON -- James River Corporation and Enron Capital & Trade Resources (ECT), a subsidiary of Enron Corp., announced today the formation of a global strategic energy alliance in which the two companies have agreed to jointly identify and develop innovative energy solutions to James River's energy-related needs at its 60 manufacturing sites worldwide.
Working together, the two companies will develop a comprehensive business plan to optimize James River's energy-related assets and reduce James River's total energy costs. While it is anticipated that the two companies will work together on a wide range of activities that could include construction and optimization of assets, the application of risk management strategies, and natural gas and power supply arrangements, James River retains rights to purchase energy from parties other than Enron. This agreement will be in effect for four years and can be extended by mutual consent of the two companies.
"Annually, James River purchases over $200 million of energy worldwide, and we believe that substantial benefits can be obtained from a strategic alliance with an innovative energy company like Enron," said Tom Single, director, energy procurement for James River. "This agreement is an important step in the evolution of our energy strategy and will position us to gain a competitive cost advantage in the rapidly changing energy marketplace."
"Enron is proud to partner in this unique energy alliance with a company as progressive as James River," said Kenneth D. Rice, chairman and chief executive officer, Enron Capital & Trade Resources - North America. "We believe James River will realize significant benefits through the focused application of Enron's innovative energy and finance capabilities. Many of these benefits can be realized even prior to the opening of retail electric markets."
In separate agreements negotiated under the umbrella of the alliance, James River has agreed to purchase all of the energy requirements for its two towel and tissue manufacturing facilities in Halsey and Clatskanie, Oregon from Enron (ECT) for five years beginning in the year 2000. This agreement is contingent upon the enactment of legislation which opens the state's retail electricity market for competition.
"These two power purchase agreements are an excellent example of the potential benefits to James River from the alliance with Enron," continued James River's Single. "Through these agreements, we are able to achieve some immediate relief from our current electricity costs plus we have contracted to purchase electricity at what we believe will be very competitive rates in the future."
"We know that the restructuring of the electricity industry is inevitable and that retail markets will soon be open to competition," continued ECT - North America's Rice. "Through ECT's expertise at managing energy price risk and uncertainty associated with an evolving industry structure, we are able to help our customers take advantage of the benefits of retail competition and give them a choice today."
Enron Corp., one of the world's largest integrated natural gas and electricity companies with approximately $15 billion in assets, operates one of the largest natural gas transmission systems in the world; is the largest purchaser and marketer of natural gas and the largest non-regulated marketer of electricity in North America; is a leading participant in liberalized energy markets in the United Kingdom and the Nordic Countries; markets natural gas liquids worldwide; manages the largest portfolio of fixed-price natural gas risk management contracts in the world; is among the leading entities arranging new capital to the energy industry; owns a majority interest in Enron Oil & Gas Company, one of the largest independent (non-integrated) exploration and production companies in the United States; owns a majority interest in Enron Global Power & Pipelines L.L.C., which is owner and manager of operating power plants and natural gas pipelines around the world; is one of the largest independent developers and producers of electricity in the world; and is a major supplier of solar and wind renewable energy worldwide. Enron is traded under the ticker symbol, "ENE."
James River Corporation, headquartered in Richmond, Va., is a leading marketer and manufacturer of paper-based consumer products, packaging, and business, printing and converting papers. The second largest worldwide producer of tissue products, James River markets such leading brands as QUILTED NORTHERN bathroom tissue, BRAWNY paper towels, VANITY FAIR napkins, and DIXIE cups and plates in North America, and LOTUS bathroom tissue, towels, and facial tissue in Europe. The company also markets QUILT-RAP sandwich wrap, QWIK WAVE microwave packaging, and EUREKA! and WORD PRO copy papers. James River's current annual sales rate is approximately $5.6 billion.
For additional information please contact:
James River Corporation
Richard B. Elder -- Media (804) 343-4785
Celeste Gunter -- Financial (804) 649-4307
Enron Corp.
Terri James -- (713) 853-7727
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