COURTLAND – Lawrence County’s largest employer, International Paper announced this morning (Wednesday) that it plans to permanently close its Courtland paper mill. The plant is Lawrence County’s largest employer.
Here is what International Paper in Memphis had to say about the decision:
“International Paper (NYSE: IP) today announced plans to permanently close its Courtland, Ala. Mill, a facility that is part of the company’s Printing and Communications Papers Business. The mill will shut down in stages with a full closure expected to be complete by the end of the first quarter of 2014. This mill closure will reduce IP’s North American uncoated and coated freesheet paper production capacity by 950,000 tons, of which 765,000 is uncoated freesheet.
“These decisions are especially difficult because of the impact to long-serving and hard-working employees, their families and the surrounding communities,” said International Paper Chairman and CEO, John Faraci. “This decision to permanently close capacity is primarily being driven by demand decline for uncoated freesheet paper products in the United States.”
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.
International Paper 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 impacted by these machine shutdowns will be eligible for severance packages and outplacement assistance consistent with company policy. 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 Senior Vice-President Tim Nicholls.
International Paper’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.”
Even though rumors have been floating about for several years as the need for this product is being supplanted by non-paper based forms of communication, the sudden announcement of a total plant shutdown was unexpected. In 2009, International Paper announced the closure of 3 of its paper mills. International Paper is the largest pulp and paper maker in the world, with production facilities in North America, Latin America, Europe, North Africa and Asia.