Boise to Convert DeRidder Newsprint Machine to Packaging, Close Two PMs at I-Falls
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Boise Inc., Boise, Idaho, USA, reports that it will invest $110-$120 million to convert an idled paper machine at its Deridder, La., mill to produce packaging grades and will close two paper machines at its International Falls, Minn., mill no later than the fourth quarter of this year. Alexander Toeldte, president and CEO, noted that "we experienced unfavorable mix changes in our Packaging segment that partially offset the benefits of the fall 2012 linerboard price increase. In addition, decreasing prices for uncoated freesheet negatively affected our results in Paper.
The investment at Deridder involves the conversion of an idled newsprint machine to produce lightweight linerboard and corrugating medium. As part of the project, the mill also will install an OCC pulping facility. The investment adds approximately 270,000 tons of lightweight containerboard capacity to the company's system and allows it to optimize the product mix on it current linerboard machine, increasing the mill's overall containerboard output by approximately 300,000 tons. Boise is targeting a mid-2014 startup for the completed project, which is expected to create about 50 jobs.
"To improve the cost competitiveness of our Paper business, where we operate against the background of secularly declining demand for our products, we have made the difficult decision to close two paper machines and an off-machine coater at our International Falls mill. These closures will reduce our annual uncoated freesheet capacity by approximately 115,000 tons, or 9%, and will allow us to focus our efforts on key products and machines that drive our profitability, improve our cash flow, and enhance the overall competitiveness of our International Falls mill and our Paper business. This decision will result in the loss of approximately 300 jobs. We understand the impact this decision has on our dedicated employees, as well as the community of International Falls. We appreciate their efforts and support over the years," Toeldte said.
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