Mosinee, Wisconsin, USA, 25 August 2008 -- (BUSINESS WIRE) -- Wausau Paper (NYSE:WPP) today announced that it will permanently shut down paper machine number 10, one of the two paper machines at its Specialty Products mill in Jay, Maine, on or before 31 December 2008, in response to dramatically increased input costs and difficult market conditions. Number 10 paper machine, with a capacity of 40,000 tons annually, presently serves the release liner market and a variety of smaller niche markets. The shutdown is expected to affect approximately 150 of the 235 employees currently at the facility.
"While the release liner market remains a strategic focus for Wausau Paper, the high cost structure of the liner machine at our Otis mill has made it uncompetitive in today's business environment," said Thomas J. Howatt, president and CEO. "While we regret the impact this decision will have on so many of our dedicated and loyal employees, it is a decision made in keeping with our commitment to address underperforming areas of our business and to deliver acceptable returns to our shareholders. This move is in keeping with our strategic marketing plan for Specialty Products that focuses on tape backing grades, high performance release liners, and food service and food packaging markets."
Pretax charges associated with the shutdown of number 10 paper machine are estimated to be USD 10 million with noncash charges, primarily related to the write-down of long-lived assets, accounting for approximately USD 6 million of this total. Pretax closure charges of USD 3 million are expected in the third quarter, with remaining charges occurring during the fourth quarter. After considering income taxes and an anticipated reduction in working capital, the effect of the shutdown is expected to be cash-neutral on a cumulative basis.
Wausau Paper, with record revenues of USD 1.2 billion in fiscal 2007, produces and markets fine printing and writing papers, technical specialty papers, and "away-from-home" towel and tissue products. To learn more about Wausau Paper, visit: http://www.wausaupaper.com.