WestRock announced after markets closed Tuesday that it will permanently close its paper mill in Tacoma, Washington, by Sept. 30.
The closure will affect the approximately 400 employees who work there. WestRock said it will offer them severance and outplacement assistance in accordance with its policies and labor agreements.
The mill produces about 510,000 tons of kraft and white top linerboard and bleached pulp annually. Most of the linerboard capacity will transfer to other WestRock mills, but about 60,000 tons of pulp and 25,000 tons of specialty grade capacity will be eliminated annually. After the shutdown is complete, WestRock will sell the mill site, a spokesperson said in an email.
The company cites “high operating costs and the need for significant capital investment” at the site as the main reasons for the closure. WestRock is one of several packaging companies that have recently announced closures as part of their footprint optimization plans.
“WestRock is working to optimize our operational footprint and consolidate production in order to improve our return on invested capital, and we have made the difficult decision to close the Tacoma mill as part of this effort,” CEO David Sewell said in the news release.
WestRock has announced other closures this year, including last month’s news of a corrugated container plant shuttering in St. Louis. Earlier this year, it announced closures of a containerboard and kraft paper facility in South Carolina and a corrugated mill near Baltimore.
During the company’s fiscal Q2 earnings call in May, CEO David Sewell pointed to an “unprecedented drop in volumes” due to a combination of a sharp and unexpected downturn in fiber demand, high inflation and shifting consumer spending. Executives on the call detailed WestRock’s optimization initiatives to improve profitability, specifically its plan to close less efficient and underperforming plants. While executives said further consolidation would come, they declined to specify which plants at that time. WestRock is slated to discuss its fiscal third-quarter results on an earnings call Thursday.
