Georgia’s Kaolin Industry Announces Economic Figures for the Year 2005

  Macon, Georgia - The China Clay Producers Association announced today the composite earnings for the four major kaolin producers in the state of Georgia for 2005.  The industry posted an after tax loss of $6.07 million which represents a loss of 0.89% on the net investment. The industry’s investment in Georgia now stands at $681 million.  Since 2001, the industry’s book value of assets has decreased by $250 million due to restructuring which has resulted in the closure of older, unprofitable assets.

 “The kaolin industry has struggled to reach reasonable returns on its investments.  The average book value for the past five years on kaolin assets was $819 million with a negative return of 0.72% on net investment,” said Lee Lemke, Executive Vice President of the China Clay Producers Association.

 “Last fall, we witnessed a significant spike in energy costs. Like so many manufacturers in Georgia, energy costs represent the second largest expenditure in the process of producing goods. This volatile trend in escalating energy costs has put tremendous pressure on the Kaolin Industry to keep it competitive in the global market place. Georgia is the only Southeastern state and only one of ten states in the nation that continues to levy a sales tax on energy used in the manufacturing process,” said Lemke.  “Direct employment in the industry totals 2,462 employees, down from its peak of 4,500 employees in 1996.”

 Since 1998, more than 130,000 of Georgia’s manufacturing jobs have vanished despite the State’s Department of Economic Development’s significant efforts to bring new jobs to Georgia.  The vacuum left by the manufacturing exodus has been filled by marginal job growth, and the pay of these new jobs is substantially less.  Dr. Roger Tutterow, Dean of the Stetson School of Business and Economics at Mercer University, said plant closings present “an interesting challenge” for the state and region.  He said the biggest problem for those who are losing jobs at these plants is that they are going to have a hard time finding jobs that will compensate them at the same rate. 

 Lemke said, “If Georgia’s General Assembly would adopt tax relief for Georgia manufacturers in the form of a sales tax exemption on the cost of natural gas, other fuels or electricity used in the manufacturing process, this exemption would significantly help Georgia manufacturers.”

 For further information, please contact Lee Lemke via mail at 113 Arkwright Landing, Macon, GA 31210; via telephone at (478) 757-1211; via fax at (478) 757-1949; or via e-mail at leelemke@georgiamining.org.

 The China Clay Producers Association members are BASF, Gordon, GA; IMERYS, Atlanta, GA; J.M. Huber Corporation, Atlanta, GA; and Thiele Kaolin Company, Sandersville, GA