RockTenn announced on Friday a $25-million investment in a new, state-of-the-art chip mill to furnish its Demopolis solid bleached sulfate (SBS) and southern bleached softwood kraft pulp mill with wood chips and bark.

The new Saltwell Chip Mill, located adjacent to the Demopolis Airport Industrial Park, will produce 1.3 million tons per year of chips and 150,000 tons per year of bark for fuel.

Road and site preparation work has already begun, and the Saltwell mill is scheduled to open in March 2011, creating approximately 16 new jobs. The project is expected to reduce wood costs for the paperboard and pulp manufacturing facility.

Combined with the company’s nearby existing Rooster Bridge Chip Mill facility, RockTenn will become the area’s largest chip producer. With more than two million tons of total annual chipping capacity, the Saltwell and Rooster Bridge complexes will produce excess chips and bark allowing for future sales to third parties.

“What we’re doing is adding our own second chip mill here,” said John Stakel, the vice president and treasure at the RockTenn headquarters in Norcross, Ga. “This way, we will not have to rely on third parties to chip wood for a portion of our needs.”

“Instead of being a net purchaser of chips to supply the mill, we’ll have excess capacity that, if we choose to, we can sell to the market,” said Demopolis mill manager Carl Wright.

“The bleachboard mill in Demopolis has had a great year,” Stakel said. “It continues to be a low-cost provider of bleachboard in the United States, and we’re very excited about the future.”

RockTenn has worked with leadership from the City of Demopolis, the Marengo and Demopolis Industrial Development Boards and the Marengo County Commission to develop the project and secure government incentives of approximately $2.6 million to improve highway and rail access to the Saltwell site.

“Immediately, we put construction workers to work,” Wright said. “We’ve got about 20 people working just on the site preparation, and we’ll have about 200 construction workers who comet through with the project. So, sometime over the next nine months, we’ll have a lot of local contractors that are doing work here.”

The Saltwell Chip Mill, Rooster Bridge Chip Mill and Demopolis Mill are part of RockTenn’s Consumer Packaging segment, an integrated system of five coated recycled paperboard mills, an SBS mill and 22 folding carton operations.

RockTenn (NYSE:RKT) is one of North America’s leading manufacturers of paperboard, containerboard and consumer and corrugated packaging, with annual net sales of approximately $3 billion. The company operates locations in the United States, Canada, Mexico, Chile and Argentina. For more information about RockTenn, visit www.rocktenn.com.