RockTenn to Permanently Close Matane Containerboard Mill
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RockTenn, Norcross, Ga., USA, yesterday (February 29) announced the permanent closure of its Matane, Que., Canada, containerboard mill. The Matane mill, which RockTenn acquired in May 2011 as part of the Smurfit-Stone acquisition, had 176,000 tpy of recycled corrugated medium production capacity. RockTenn ceased production at the mill in late January 2012. The company notes that it took this action to balance its overall containerboard mill system capacity to match system demand, in light of major steps RockTenn is taking to realign system capacity and lower average system costs.
The Matane mill was the highest cost mill in the RockTenn containerboard mill system after accounting for all costs, including freight and overhead. RockTenn intends to work with the City of Matane and other interested parties to determine the best alternative use for the site. The company expects to incur pre-tax charges currently estimated at $29 million, including an estimated $12 million pre-tax for non-cash inventory and property, plant, and equipment write-downs.
RockTenn expects to record approximately $23 million of the charges in the second fiscal quarter ending March 2012. The remaining charges to decommission and dispose of the facility will be expensed as incurred. The amount and timing of expense incurred may vary depending upon, among other things, the duration and method of disposal. RockTenn believes that the containerboard system cost savings from the closure of the Matane mill will be approximately $16 million per year.
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