Georgia’s Kaolin Industry Announces Economic Figures for the Year 2006

  Macon, Georgia - The China Clay Producers Association announced today the composite earnings for the four major Kaolin producers in the state of Georgia for 2006. The industry posted an after-tax profit of $20 million, which represents a profit of 2.07% on net investment. This profit picture is an improvement over 2005 industry figures that showed a $6 million loss.

Due to the rigorous manufacturing process that kaolin must go through, the industry's investment in Georgia now stands at $870 million. 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 $806 million with a positive return of 2.31% on net investments," said Lee Lemke, Executive Vice President of the China Clay Producers Association.

“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 cost has put tremendous pressure on the Kaolin Industry to keep competitive in the global market place. Georgia is the only southeastern state and only one of 10 states in the nation that continues to levy a sales tax on energy used in the manufacturing process,” said Lemke. For three years the Georgia General Assembly has considered legislation that would remove the four cent sales tax placed on energy used in the manufacturing process. If adopted, this tax relief for Georgia Manufacturers would be in the form of a sales tax exemption on the cost of natural gas, electricity, and other fuels used in manufacturing process. Current escalation of energy costs is having a huge impact upon our operations. The industry is unable to absorb huge swings in costs. As it is, the kaolin industry is already struggling to address the rapid rise in health care costs, environmental compliance, and global competition. If the Georgia General Assembly would pass a sales tax exemption on energy, Georgia Manufacturers would no longer be at a competitive disadvantage with our surrounding states.

Since 1996, direct employment in the kaolin industry has almost dropped by 50%. Current employment stands at 2373 employees. Production in terms of tonnage of kaolin clay produced has dropped about 19.8% since 1997. Last year, the industry manufactured 6,000,000 tons of clay products used in making paper, plastics, rubber, paints, and many other products.

For further information, please contact Lee Lemke via mail at 113 Arkwright Landing, Macon, GA 31210; via telephone at 478-757-1211; fax at 478-757-1949;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