Paper giant WestRock is shutting down a nearly 100-year-old mill in Tacoma, Wash. that consumes OCC from recycling programs. The company says its decision is driven by high operating costs.
According to a press release from the company, production will cease by Sept. 30, 2023. The mill produces bleached pulp as well as kraft and white-top liner, with a combined annual capacity of 510,000 tons.
According to state of Washington permits, the mill consumes about 650 tons per day of OCC. It has an OCC re-pulping and recycling facility on site. The mill was constructed in 1929 under different owners.
“WestRock is committed to improving its return on invested capital as well as maximizing the performance of its assets,” the press release stated. “The combination of high operating costs and the need for significant capital investment were the determining factors in the decision to cease operations at the mill.”
According to investor filings, the company will take a $345 million charge to close the plant, including about $247 million in asset write-downs, $12 million in severance and $86 million in other restructuring costs.
Most of the kraft and white top liner production previously provided by the mill will be taken over by other mills in the WestRock system, the press release added, but about 60,000 tons of pulp and 25,000 tons of specialty grade capacity will be lost.
David Sewell, the company’s CEO, noted in the press release that the WestRock “is working to optimize our operational footprint and consolidate production in order to improve our return on invested capital.”
In other closure news, tissue manufacturer Essity closed a paper mill in South Glens Falls, N.Y. and also plans to close a converting facility and a warehouse in upstate New York, citing its consolidation strategy.
The Swedish company paid $3.6 million in 2019 to upgrade recycled fiber capacity at the South Glens Falls mill.