TICONDEROGA - International Paper has announced it will permanently shut down three U.S. mills and cut 1,600 jobs due to excess capacity in the North American market.
The Ticonderoga plant is not affected.
The closures affect the plant and associated operations in Franklin, Va., as well as containerboard mills in Pineville, La., and Albany, Ore.
In addition, the company will permanently shut down the previously idled No. 3 machine at its Valliant, Okla., containerboard mill.
"We recognize these are very difficult decisions affecting our employees, their families and the communities surrounding these mills," Chairman and CEO John Faraci said in a prepared statement. "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."
Since the onset of the global recession, demand for International Paper's uncoated freesheet in North America has declined precipitously, prompting the company to re-evaluate its uncoated freesheet operations.
The planned shutdowns will reduce the company's North American paper and board capacity by 2.1 million tons.
As for the containerboard and coated paperboard businesses, International Paper said it expects demand to resume growth as the economy rebounds. However, the company doesn't foresee a return to 2008 levels in the near future. The Louisiana plant is expected to close by mid-December; the Oregon plant by the end of this year; and the Virginia plant in the spring of 2010.
International Paper said the shutdowns will not impact its ability to serve its customers.
The company said it will work with union officials concerning severance benefits for hourly employees. Salaried employees impacted by these shutdowns will be offered severance packages and outplacement assistance consistent with company policy.
International Paper is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include uncoated papers and industrial and consumer packaging.