SAVANNAH, Ga.—International Paper Co. said Thursday that it will shut down two paper mills in Georgia, resulting in the loss of over 1,100 jobs and the closure of a facility that has been a mainstay of Savannah’s economy for almost a century.
Savannah and Riceboro Mills Closing
By the end of September, the Memphis-based corporation plans to close its mills in Savannah and Riceboro. According to documents filed with state authorities, some 800 positions will be eliminated in Savannah and 300 in Riceboro.
Since the Great Depression, the Savannah mill, which was constructed in the 1930s, has been a major employer. Earlier this year, International Paper purchased the 1968-opened Riceboro mill.
Corporate Restructuring and Sale
The closures are part of a larger restructuring initiative. International Paper declared that it will pay $1.5 billion to the private equity firm American Industrial Partners for its pulp sector. Pulp for tissues, diapers, and other absorbent goods is produced by that division.
The company stated that it will write down $570 million in mill assets and incur an accounting charge of $700 to $900 million due to the decreased value of its cellulose fiber business. An estimated $158 million will be spent on closure expenses and severance payouts.
In order to increase cardboard manufacturing, International Paper also intends to invest $250 million to expand its factory in Selma, Alabama.
Local and Statewide Fallout
Van Johnson, the mayor of Savannah, expressed his disappointment and sadness at the news. It was a really depressing day for Savannah, according to Trip Tollison, CEO of the Savannah Economic Development Authority.
Speaker of the Georgia House Jon Burns cautioned that the consequences will go well beyond the employees. According to him, the economic fabric of the entire southeast Georgia region as well as Georgia’s timber industry will surely suffer greatly as a result of these mill closures.
Industry Pressures
The biggest producer of containerboard in North America, International Paper, has experienced a decline in both market share and profitability. According to corporate executives, the reductions were required to streamline operations and concentrate on areas and goods where the business can maintain its competitiveness.
Executive Vice President Tom Hamic stated that although these choices are challenging, they are necessary to set up International Paper for long-term success.
The announcement comes after more than 1,100 workers lost their employment as a result of recent mill closures in Georgetown, South Carolina, and Campti, Louisiana.
The loss of the Savannah mill, which has been a part of the community for 90 years, is especially painful for Georgia’s timber workers and their families.
AtSaludaStandard-Sentinel.com, readers throughout Georgia impacted by the mill closures are encouraged to express their feelings and experiences.
