Norcross, Georgia, USA, 29 February 2012 -- (BUSINESS WIRE) -- RockTenn (NYSE:RKT) announced today the permanent closure of its Matane, Quebec, containerboard mill. The Matane mill, which RockTenn acquired in May 2011 as part of the Smurfit-Stone acquisition, had 176,000 tons per year of recycled corrugated medium production capacity.
RockTenn ceased production at the mill in late January 2012. RockTenn took this action to balance its overall containerboard mill system capacity to match system demand, in light of major steps RockTenn is taking to realign system capacity and lower average system costs.
The Matane mill was the highest cost mill in the RockTenn containerboard mill system after accounting for all costs, including freight and overhead. RockTenn intends to work with the City of Matane and other interested parties to determine the best alternative use for the site.
RockTenn expects to incur pre-tax charges presently estimated at $29 million, including an estimated $12 million pre-tax for noncash inventory and property, plant, and equipment write-downs. RockTenn presently expects to record approximately $23 million of the charges in the second fiscal quarter ending March 2012. The remaining charges to decommission and dispose of the facility will be expensed as incurred. The amount and timing of expense incurred may vary depending on, among other things, the duration and method of disposal. RockTenn believes that the containerboard system cost savings from the closure of the Matane mill will be approximately $16 million per year.
RockTenn is one of North America's leading integrated manufacturers of corrugated and consumer packaging and recycling solutions, with net sales of USD 10 billion. RockTenn's 26,000 employees are committed to exceeding their customers' expectations - every time. The company operates locations in the United States, Canada, Mexico, Chile, Argentina, and China. For more information, visit www.rocktenn.com.