Glatfelter announces several cost reduction measures in its Specialty Papers Business Unit. The changes include the shutdown of paper machine №24 (“PM24”) at the Company’s Chillicothe, Ohio, facility, the elimination of approximately 50 affected hourly positions at the facility, and a reduction of 70 salaried positions across the business unit.
The PM24 shutdown will remove approximately 80,000 tons, or 10%, of capacity from the Specialty Papers Business Unit and reduce the Chillicothe facility’s exposure to purchased pulp. The Company plans for production to be absorbed by the remaining seven paper machines in the business unit.
Production on PM24 is planned to end by September 30, 2017, and will result in the elimination of approximately 50 manufacturing jobs. Glatfelter will assist the affected employees to attempt to identify new positions for them within the mill.
In addition, Specialty Papers’ salaried workforce will be reduced by approximately 70 employees across the business. The machine shutdown and headcount reductions are expected to result in an annual net profitability improvement of approximately $9 million and the avoidance of costly market-driven downtime.
In connection with these cost reduction initiatives, the Company will recognize an aggregate pre-tax charge to earnings of approximately $8 million to $9 million including an estimated $5 million to $6 million in non-cash charges. The majority of the charge is expected to be recognized in the 3Q 2017.
Glatfelter is a global supplier of specialty papers and engineered materials.
