SPOKANE, Wash.--(BUSINESS WIRE)--
Clearwater Paper Corporation (NYSE:CLW) today announced the
permanent closure of its Oklahoma City converting facility and permanent
shutdown of two tissue machines at the company's Neenah, Wisconsin,
tissue facility.
"As an integral step in our overall strategy to optimize our operations
through better asset utilization, we will be taking these difficult but
necessary actions while delivering on our growth objectives," said Pat
Burke, group president for Clearwater Paper.
Clearwater Paper intends to run its Oklahoma City facility until its
permanent closure on March 31, 2017. All of the facility's 131 employees
will be impacted. The facility converts large parent rolls of tissue
into packaged products.
"Because of significant productivity gains from our cost and
optimization programs across the company, we expect Oklahoma City's
production to be effectively absorbed and more efficiently supplied by
other Clearwater Paper facilities," said Glenn Taylor, vice president of
manufacturing for Clearwater Paper's consumer products division.
Also, as part of an overall facility optimization and restructuring
plan, Clearwater Paper's Neenah location will permanently shut down two
of the company's highest-cost tissue machines, affecting approximately
85 of the facility's approximate 400 employees and removing a total
production capacity of 32,000 tons beginning December 31, 2016. Three
remaining tissue machines will continue to manufacture an array of
private label and away-from-home tissue products.
"Although a difficult decision when considering the impacted employees
at Neenah, we expect the plant's restructuring to lower our overall
costs and significantly strengthen the facility," said Taylor.
The company will work closely with state employment agencies to assist
employees in receiving training, educational benefits and other benefits
that enable them to find new employment as quickly as possible. The
company will also provide private career assistance services to help
employees through this difficult time.
The company expects the total impact of non-recurring exit related costs
to be approximately $13 to $16 million, $4 to $6 million of which is
expected to be incurred this year with the remainder in 2017. The cost
savings benefits resulting from the facility consolidation and
optimization are expected to be $10 million on an annual basis, with $7
to $9 million in 2017, which will contribute to the company meeting its
previously announced operational improvement target.
"Clearwater Paper's employees remain our primary consideration and we
are working to do as much as we can for those affected by utilizing all
resources to help them through this difficult time," said Pat Burke. "We
are working with local and state agencies to supply multiple job options
to the employees."
ABOUT CLEARWATER PAPER
Clearwater Paper manufactures quality consumer tissue, away-from-home
tissue, parent roll tissue, bleached paperboard and pulp at
manufacturing facilities across the nation. The company is a premier
supplier of private label tissue to major retailers and wholesale
distributors, including grocery, drug, mass merchants and discount
stores. In addition, the company produces bleached paperboard used by
quality-conscious printers and packaging converters. Clearwater Paper's
employees build shareholder value by developing strong customer
partnerships through quality and service.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 as
amended, including statements regarding the timing of the closure of the
Oklahoma City facility, the shutdown of the paper machines at the Neenah
facility, strategy and growth objectives; optimization program; tissue
production; the costs and timing of costs associated with the closure
and the shutdown; the cost savings benefits and timing of benefits
associated with the closure and shutdown; and operational improvement
targets. These forward-looking statements are based on current
expectations, estimates, assumptions and projections that are subject to
change, and actual results may differ materially from the
forward-looking statements. Factors that could cause actual results to
differ materially include, but are not limited to, risks and
uncertainties arising from the possibility that the closure of the
Oklahoma City facility may be delayed or may not occur; the possibility
the paper machines shutdowns may not occur; difficulties with the
relocation and optimization of manufacturing equipment, including
equipment malfunction and damage; labor disruptions; competitive pricing
pressures for the company's products, including as a result of increased
capacity as additional manufacturing facilities are operated by the
company's competitors; changes in the U.S. and international economies
and in general economic conditions in the regions and industries in
which the company operates; changes in customer product preferences and
competitors' product offerings; the loss of or changes in prices in
regards to a significant customer; cyclical industry conditions; changes
in the cost and availability of wood fiber and wood pulp; inability to
successfully implement the company's operational efficiencies and
expansion strategies; changes in transportation costs and disruptions in
transportation services; customer acceptance, timing and quantity of
purchases of the company's tissue products; changes in costs for and
availability of packaging supplies, chemicals, energy and maintenance
and repairs; environmental liabilities or expenditures; manufacturing or
operating disruptions, including IT system and IT system implementation
failures, equipment malfunction and damage to the company's
manufacturing facilities; changes in expenses and required contributions
associated with the company's pension plans; reliance on a limited
number of third-party suppliers for raw material; and other risks and
uncertainties described from time to time in the company's public
filings with the Securities and Exchange Commission. The forward-looking
statements are made as of the date of this press release and the company
does not undertake to update any forward-looking statements.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161129006133/en/
Clearwater Paper Corporation
News media: Matt Van Vleet,
509-344-5912
Investors: Robin Yim, 509-344-5906
Source: Clearwater Paper Corporation
News Provided by Acquire Media