Atlanta, Georgia, USA, 11 December 2008 -- /PRNewswire/ -- Caraustar Industries, Inc. (Nasdaq: CSAR - News) today announced the permanent closure of its Richmond paperboard mill in Richmond, Virginia, effective 11 December 2008.  The company also announced that effective 19 December 2008, it will idle the Carolina paperboard mill in Charlotte, North Carolina.

The Richmond mill is an uncoated recycled boxboard (URB) manufacturing facility with annual capacity of 49,000 tons. The Carolina mill is a URB manufacturing facility with annual capacity of 62,000 tons. The company will continue to monitor its product demand and expects to determine by the end of the first quarter 2009 when it will restart URB production at the Carolina mill.

Associated with the Richmond mill closure, the company will record a pre-tax charge of approximately USD 5.9 million, of which approximately USD 4.7 million will be non-cash. This rationalization is expected to generate an estimated USD 5.1 million in annual pre-tax savings.

The closure of the Richmond mill will affect approximately 52 salaried and hourly employees. Caraustar will provide a comprehensive program of separation pay, benefits coverage, and job assistance to the employees affected by the Richmond closure to facilitate their transition to alternate employment.

Greg Bartlett, vice president, sales Mill Group, stated "Recession and declines in product demand necessitate that the company move aggressively to retain cost efficiencies and increase capacity utilization across its mill system. Strategic capital investments have enhanced our mill system and allowed for this further consolidation. We value our customer relationships and will continue to supply all of their needs from other Caraustar mills."

Caraustar Industries, Inc. is one of North America's largest integrated manufacturers of 100% recycled paperboard and converted paperboard products. The company is a socially responsible corporation, is committed to environmentally sound practices, and is dedicated to providing customers with outstanding value through innovative products and services. Caraustar has developed its leadership position in the industry through diversification and integration from raw materials to finished products. Caraustar serves the four principal recycled boxboard product end-use markets: tubes and cores, folding cartons, gypsum facing paper, and specialty paperboard products. For additional information on Caraustar, visit the company's Web site at www.caraustar.com