Temple-Inland Closing Mill, Machines

Not long after closing the acquisition of Gaylord Container, Temple-Inland Inc. said it will permanently close Gaylord’s California mill and shut three paper machines at its mill in Louisiana. The four machines in total have capacity for 590,000 tons/year of containerboard, accounting for 40 percent of Gaylord’s capacity and 1.5 percent of North American capacity for the grade, an analyst commented.

 “This is a major positive for both TIN and the entire containerboard industry, in our view,” said Morgan Stanley Dean Witter analyst Matt Berler.

The spokesman summarized the machines were being closed because of the drastic reduction in the export linerboard market, excess capacity of containerboard, and an expected rise in old corrugated container (OCC) prices.

Berler said Temple-Inland’s buy of Gaylord likely rescued the latter from bankruptcy which would have caused Gaylord to operate its three mills at full capacity in order to generate cash flow.

A Temple-Inland spokesman said today the recycled liner mill in Antioch, Calif., near San Francisco, will be closed down by the end of the year. Details were not available. The mill is listed with three paper machines--two that had been previously idled--with reported production of more than 400,000 tons/year. About 180 union members work in the paper mill.

The fate of the California mill’s paper recycling business and a 50 MW cogeneration plant were not revealed.

Temple-Inland will also permanently shut two containerboard machines that have been idled since June at the former Gaylord mill in Bogalusa, La. A third kraft paper machine there will also be closed by the end of the year. The machines had all been idled last year and have reported capacity for about 190,000 tons/year of liner and kraft paper.

The Bogalusa mill will apparently operate its two biggest kraft linerboard machines, with combined capacity of about 840,000 tons/year. The mill employs a total of 650 workers.