Paper Makers Make More Cuts
Sappi suspends operations, International Paper sells facilities.
The down economy and reduced demand have taken a toll on paper makers. One producer, Sappi Fine Paper North America, announced that it will indefinitely suspend operations at its facility in Muskegon, Michigan, resulting in the furlough of approximately 190 salaried and hourly employees. The suspension is set to begin April 1.
The company said the suspension was necessary in light of “significantly lower global demand for coated fine paper products.” As part of a separate cost-cutting initiative, Sappi also said it is eliminating an additional 70 positions company-wide.
UPM is suspending production at a pair of its mills in Finland in April. The suspension is said to result in a 880,000-ton per-year reduction of coated and uncoated specialty paper as well as uncoated mechanical magazine paper.
Meanwhile, Memphis, Tennessee-based International Paper said it is divesting the equivalent of 143,000 acres of properties located in southwestern U.S. The company is selling 114,000 acres to the American Timberlands Fund for $220 million in cash and donated the remaining acres (worth approximately $55 million) in exchange for a 20 percent investment in the fund.
“This was an attractive opportunity, and we intend to use the proceeds received at closing to pay down debt,” IP’s chairman and CEO John Faraci said in a statement.