Buckeye's Chairman and CEO John Crowe said that "this closure has become necessary due to the facility's uncompetitive cost position for the products it makes. This is primarily driven by the high cost of its cotton linter raw material supply. It is unfortunate that this closure will result in the termination of employment for approximately 60 dedicated employees. We have owned and operated the facility since 2000, and we value and appreciate the many contributions of the organization over the past 12 years. Buckeye will continue to operate the waste water treatment facility for the shared industrial site while we continue discussions with interested parties for the sale of the facility.
"We expect to incur about $2.4 million in restructuring expenses in calendar 2012 and a non-cash asset impairment charge of about $49 million in the October-December 2011 quarter. The closure is expected to generate an approximate $20 million cash benefit, primarily due to tax benefits related to the investment loss, assuming we are able to utilize all of our potential cellulosic biofuel credits by June 2016. Any additional cash benefit will be dependent on the final outcome of the facility sale process," Crowe explained.
Buckeye, a producer and marketer of specialty fibers and nonwoven materials, currently operates facilities in the U.S., Germany, Canada, and Brazil. Its products are sold worldwide to makers of consumer and industrial goods.
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