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International Paper writes off $1.1bn in US mill shutdownsDavid Elliott, 23 October 2009Be the first to comment on this article International Paper is to make 1,600 redundancies and close three containerboard plants in the US in a move that will cut its production capacity in north America by 1.4m tonnes per year. The group yesterday announced the plans to shut down plants in Oregon, Louisiana and Oklahoma as well as an office paper mill in Virginia by the end of the year. It said it would write off $1.1bn against the closures as well as paying out around $60m in redundancy packages. The closures of the three containerboard plants, which represent around 12% of IP’s North American capacity for the material, will mean the loss of 500 jobs in total, while the office paper mill’s shutdown will lead to 1,100 redundancies. The company said that it expected demand for containerboard and coated paperboard to resume growth as the economy rebounds, but that it would not reach the highs of 2008 “in the near future”. The cutbacks are just the latest in a series of closures around International Paper’s network. In February, it announced the closure of its Inverurie uncoated paper mill in Scotland. Meanwhile, in documents last year, the group was quoting a total employee figure of 65,000 people; it now quotes a figure of 58,000 staff worldwide. IP chairman and chief executive John Faraci said in a statement yesterday: “We have concluded that we have excess capacity in our North American paper and packaging businesses, and these decisions will better match our supply with our expected customer demand.” Shares in International Paper, which has sales of more than $25bn and in the UK runs consumer packaging facilities in Cheshire and in South Wales, rose on the news in trading yesterday. Click here for all today’s headlines from across the packaging industry Speak Your Mind |
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