SAVANNAH, Ga. (AP) — Worldwide Paper Co. mentioned Thursday that it might shut two Georgia paper mills, together with one which has been a cornerstone of Savannah’s financial system for 90 years.
The corporate, based mostly in Memphis, Tennessee, mentioned it might cease making cardboard in Savannah and Riceboro by the tip of September. The corporate will lay off about 800 staff in Savannah and about 300 staff in Riceboro, in accordance with firm statements and filings with state regulators.
The announcement got here on the identical day that the corporate mentioned it might promote its pulp division to non-public fairness agency American Industrial Companions for $1.5 billion. Worldwide Paper had beforehand introduced it might take into account a sale to focus the corporate solely on its packaging enterprise. The sale is predicted to shut by the tip of the 12 months.
Worldwide Paper additionally mentioned it might spend $250 million to develop manufacturing of cardboard at a mill in Selma, Alabama.
Worldwide Paper will take a $700 to $900 million accounting cost to replicate the lowered worth of the cellulose fiber enterprise. The pulp is utilized in towels, tissues and as absorbent filler in diapers and different private care objects. Some specialty pulp can be utilized in development supplies and paints.
Closing the 2 mills will scale back Worldwide Paper’s capability to make containerboard by 1.43 million tons (1.30 million metric tonnes). The corporate will write down the belongings of the 2 mills by $570 million and expects to spend $158 million on severance funds and different closure prices.
The corporate says its making an attempt to extend gross sales and revenue by simplifying operations. Worldwide Paper has mentioned that it is the largest maker of containerboard in North America, however that is it is making an attempt to reverse a development of lowering income and market share.
“Whereas troublesome, these choices are important to positioning Worldwide Paper for long-term success, enabling us to deal with the geographies, prospects, and merchandise the place we are able to create essentially the most worth,” Govt Vice President Tom Hamic mentioned in a press release.
Earlier this 12 months, Worldwide Paper closed a mill in Campti, Louisiana, shedding 470 individuals. Final 12 months, the corporate closed a 675-worker mill in Georgetown, South Carolina.
The Savannah mill was constructed within the mid-Thirties by what was then Union Bag and Paper, with jobs serving to to ease the impression of the Nice Despair on the coastal metropolis. The mill in Riceboro, south of Savannah, opened in 1968 and was acquired by Worldwide Paper when it purchased British papermaker DS Smith earlier this 12 months.
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