Greif (NYSE: GEF) shares were little changed Wednesday, as the global leader in industrial packaging products and services, announced today it will permanently cease production on the Number 1 Paperboard Machine (A1) in Austell, GA and permanently close the containerboard and uncoated recycled paperboard (URB) mill in Fitchburg, MA.
“Decisions like these are extremely difficult because of the impact it has on our colleagues and their families, as well as the larger community,” said President and CEO Ole Rosgaard. “We are grateful to our colleagues in Austell and Fitchburg for their contributions to the company and are committed to helping them navigate next steps by providing severance benefits and outplacement assistance.”
In total, approximately 140 positions will be impacted. Ceasing production at A1 – a non-integrated URB asset for the company - is a result of increased cost and declining demand in its major end use markets of furniture, books, and binders. The combination of high operating costs and the need for significant capital investment were the determining factors in the decision to close the Fitchburg mill. Together, these actions will reduce the containerboard capacity of Greif’s mill network by 100,000 tons, and URB capacity by 90,000 tons.
Shares in GEF began the mid-week session down two cents to $61.61.
