Smurfit-Stone Container Corp. announced that it is closing several mills, as well as a number of packaging operations. The company cited continued difficulties in the manufacturing sector as reasons for the shutdowns.
The company announced that it will be permanently closing its Thunder Bay, Ontario corrugated medium mill, as well as idling one of the two paper machines it has at its Jacksonville, Fla., containerboard mill.
The company also announced plans to permanently close one of its machines at its Philadelphia coated recycled boxboard mill.
The company also said that over the next 18 months it would continue to reduce the cost and production of its corrugated and container business, including consolidating some facilities.
The company expects to close down the operations by the fourth quarter of the year.
“The steps we are taking today, while extremely difficult, address the realities Smurfit- Stone faces in today’s market environment and will better position our company for long-term growth and success,” said Patrick J. Moore, Smurfit-Stone chairman, president and CEO. “The manufacturing economy in general and the packaging sector in particular face new market realities. These realities are key factors in the actions announced today. Other considerations, including operating costs, strategic fit, and our ability to continue to deliver quality products and services to our customers, also were part of the decision-making process.”
Closing the Thunder Bay facility, which produces recycled medium, and idling production on the No. 1 paper machine at Jacksonville, will reduce Smurfit-Stone’s annual containerboard capacity by about 515,000 tons, or six percent. The No. 2 machine at Jacksonville, which currently manufactures recycled linerboard and is more efficient, will be modified to produce corrugating medium.
Smurfit-Stone plans to permanently close the No. 5 machine at its Philadelphia boxboard mill, which will reduce the company’s annual coated boxboard capacity by about 70,000 tons, or 12 percent. Philadelphia’s No. 6 machine will continue to serve the mill’s customer base.
The announcement of the Thunder Bay closure, as well as the decision to idle paper machines in Philadelphia and Jacksonville will likely cut into the demand for recovered fiber that the three facilities consumed.