International Paper Announces Closures at Two Mills
Memphis, Tennessee, USA, 21 November 2008 -- /PRNewswire/ -- International Paper today announced the indefinite closure of its pulp mill in Bastrop, Louisiana. The decision to idle the 100% pulp mill operation is because of the continuing decline in pulp demand from its customers worldwide coupled with a weak economy across the globe.
The closure will reduce the company's annual pulp production capacity by approximately 450,000 tons. The shutdown process will begin immediately. The mill is currently taking downtime due to a lack of pulp orders.
The Louisiana mill is part of International Paper's Printing & Communications Papers sector. The mill operates three pulp machines that produce market pulp in roll and bale and fluff pulp for hygiene products. The facility employs approximately 550 people.
"We have carefully reviewed current options for the Louisiana mill and determined that because of an accelerating decline of pulp demand by our customers and the continued weakening of the global economic outlook for the foreseeable future, we needed to reduce our pulp production and close the mill indefinitely," said Wayne Brafford, IP's senior vice president, Printing & Communications Papers. "Our company is committed to matching our supply with the needs of our customers, which makes this difficult business decision necessary in a rapidly declining pulp marketplace. We will also work closely with our customers to help them meet their product needs."
"As always, the most difficult part of this closure is the effect on employees, their families, and the community," said Brafford. "The hard-working employees at the Louisiana mill have not only consistently performed and made excellent quality products for years, but have also been great examples of excellence in safety and employee engagement. We will do all we can to assist them during the closure process."
The indefinite closure will affect approximately 550 employees at the Louisiana mill. Salaried and nonexempt employees will be offered severance packages and outplacement assistance. The company is committed to working closely with union officials to determine benefits. Negotiations concerning the effects of the closure with the union will begin as soon as possible. Employee assistance providers will be available to support employee and family needs.
In addition, IP will permanently shutdown the No. 3 uncoated freesheet paper machine at its mill in Franklin, Virginia. This will result in the permanent curtailment of the company's annual paper production capacity by approximately 150,000 tons of uncoated freesheet paper and affect approximately 50 employees. The plan targets 23 November to begin the shutdown. In addition, approximately 60,000 tons of lack of order downtime will be taken out of the company's U.S. uncoated freesheet paper mills during the fourth quarter.
"Because of the continuing decline of uncoated freesheet paper demand, we must reduce our capacity and announce this permanent machine shutdown," Brafford said. "Our company's commitment to optimize our mill operations to meet the needs of our customers made this difficult business decision necessary. The additional capacity reductions, as lack of order downtime, reflect the current economic weakness in our markets," added Brafford.
"We also understand this announcement will create uncertainty for employees, their families, and the communities affected, especially in the Franklin area," said Brafford. "We will do all we can to assist them during the shutdown process and downtime period."
International Paper (NYSE: IP) is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia, and North Africa. Its businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the company's North American distribution company. Headquartered in Memphis, Tennessee, the company employs more than 65,000 people in more than 20 countries and serves customers worldwide. 2007 net sales were approximately USD 22 billion. For more information about International Paper, its products, and stewardship efforts, visit www.internationalpaper.com.