Neenah Paper to Close Ripon Fine Paper Mill
Alpharetta, Georgia, USA, 08 May 2009 -- /PRNewswire/ -- Neenah Paper (NYSE: NP) today announced plans to permanently close its fine paper mill located in Ripon, California. Operations at the mill, which has one paper machine with an annual capacity of approximately 35,000 tons, will be phased out over the next two months. Production from Ripon will be shifted to the company's other premium fine paper mills.
"This decision is consistent with our strategy to drive consolidation in the premium fine paper category through leading brands and a cost efficient manufacturing platform. Closing the Ripon mill allows us to significantly reduce costs and simplify our supply chain without compromising our ability to serve our customers," said
John O'Donnell, president - Fine Paper. "The employees at Ripon have done an outstanding job this year, working safely and efficiently despite reduced schedules that have resulted from lower market demand. We will now focus on assisting these employees through this difficult transition as well as marketing the site to potential buyers."
The closure is expected to result in a pre-tax charge to earnings of approximately USD 17 million in the second quarter comprised of USD 6 million in noncash charges, primarily for the write-down of production assets at the Ripon facility, and USD 11 million related to cash payments for contract terminations, severances, and other employee costs. Approximately USD 7 million would be paid in 2009, with remaining payments in 2010 and beyond. In addition to future proceeds from selling the Ripon site, expected benefits include annual cash savings of more than USD 7 million as a result of reductions in fixed costs and improved distribution and manufacturing efficiencies.
Neenah Paper is a leading global manufacturer of premium, performance-based papers and specialty products used in a variety of applications including filtration, printing and writing, and as backing and component materials for many specialized industrial and consumer applications. Based in Alpharetta, Georgia, the company has paper manufacturing operations in the United States and Germany and owns approximately 500,000 acres of timberlands in Nova Scotia, Canada. Additional information about Neenah Paper can be found at www.neenah.com.