Rock-Tenn Company announces closure of Waco folding carton plant

Aug 08, 2005. /Lesprom Network/. Rock-Tenn Company announced its decision to close its Waco, Texas, folding carton plant in the first quarter of fiscal 2006. The plant was acquired on June 6, 2005 as part of the purchase of the Gulf States paperboard and packaging businesses. Rock-Tenn will transfer the majority of the Waco facility's current production to other plants. Mike Kiepura, executive vice president - Folding Carton division, stated, "Gulf States' Waco plant was the weakest performer in the Gulf States system and, based on our operating review, we cannot justify the investment that would be required to continue operations at this plant." Rock-Tenn Company expects to incur cash costs in connection with the closure of approximately $3.5 million, which will include severance, equipment relocation and other costs associated with the facility's closure, which will be partially offset with proceeds from the sale of the facility. Approximately $2 million of these costs will be allocated to the purchase price of the Gulf States acquisition and the remainder will be designated as restructuring costs or expensed to the company's operations on a current basis. The Waco closure is expected to reduce annual operating costs by $3 million that will contribute to the $20 million of synergies that Rock-Tenn expects to realize following its acquisition of Gulf States' paperboard and packaging businesses. Rock-Tenn Company provides a wide range of marketing and packaging solutions to consumer products companies at low costs, with combined pro forma net sales of $2.1 billion and operating locations in the United States, Canada, Mexico and Chile. The company is one of North America's leading manufacturers of packaging products, merchandising displays and bleached and recycled paperboard.