Caraustar Industries, Inc. announces closure of Palmer carton plant

Jun 22, 2005. /Lesprom Network/. Caraustar Industries, Inc. announced on June 21 the closure of its Palmer carton plant, Thorndike, Massachusetts, a folding carton plant of the Custom Packaging Group. The closure of this facility is a continuation of the previously announced initiative to right-size operations to better utilize capacity and achieve greater cost efficiencies. Associated with this closure, Caraustar will incur total costs of approximately $1.9 million. Of the total costs, $0.8 million will be a restructuring charge consisting of severance and other contractual obligations. The remaining $1.1 million will be cash costs that consists of fixed asset impairment and equipment relocation costs and will be expensed over the remainder of 2005. The rationalization of this facility is expected to generate annual pre-tax savings of approximately $1.2 million. This facility will continue to operate until July 15, 2005 to facilitate customer transition, at which time customers will be served by other Caraustar operations. Approximately 70 salaried and hourly employees will be affected by this closure. Caraustar will provide these employees with a separation program including severance pay, benefits continuation and job placement assistance. Caraustar, a recycled packaging company, is one of the world's largest integrated manufacturers of converted recycled paperboard. Caraustar has developed its leadership position in the industry through diversification and integration from raw materials to finished products. Caraustar serves the four principal recycled boxboard product end-use markets: tubes, cores and composite cans; folding cartons; gypsum facing paper and specialty paperboard products.