IP to Close Courtland, Ala., Mill, Lay Off 1,100

International Paper Co., Memphis, Tenn., USA, yesterday (September 11) said it will close its Courtland, Ala., paper mill by early next year, laying off 1,100 workers. The mill has a production capacity of 950,000 tpy, of which 765,000 tpy is uncoated freesheet.

"This decision to permanently close capacity is primarily being driven by demand decline for uncoated freesheet paper products in the U.S.," CEO John Faraci said in a statement. The decision to close the mill took months and was finalized at a meeting of IP's board of directors on Tuesday of this week.

The Courtland mill produces papers for forms, envelopes, labels, copiers, printers, and magazines. The demand for uncoated freesheet in North America has been in decline since 1999 and has recently accelerated as consumers continue to switch to electronic alternatives such as online publications and electronic billing and filing.

IP said that it is committed to helping the 1,100 employees impacted by the closure. The company will work closely with union officials concerning benefits and other assistance programs for impacted hourly employees. Salaried employees will be eligible for severance packages and outplacement assistance. Employee assistance providers will be available to support employee and family needs.

"We explored numerous business and re-purposing options for the Courtland Mill, but concluded that permanently closing the mill best positions the business for the future," said Printing and Communications Papers SVP Tim Nicholls.

After the Courtland closure, IP's Printing and Communications Papers Business will consist of four paper mills focused on uncoated freesheet, bristols, and specialty papers markets:

Two uncoated freesheet paper mills—Eastover, S.C., and Riverdale, Ala.
Two specialty paper mills—Georgetown, S.C., and Ticonderoga, N.Y.

The company's fluff pulp business is not impacted by this announcement.

"IP's Printing Papers business remains a valuable and strategic part of IP. Our manufacturing, commercial, and supply chain capabilities are strong, as is our commitment to serving the North American uncoated freesheet market," Nicholls added.

The company estimates that the mill closure will result in pre-tax noncash asset write-off and accelerated depreciation charges of approximately $550 million and pre-tax cash severance and other shutdown charges of approximately $125 million to be recorded during the remainder of 2013 and in 2014.

TAPPI
http://www.tappi.org/