Greif announced Wednesday that it will shut down production, at least in part, at two sites, which will affect 140 jobs.
The industrial packaging company will permanently cease production on the Number 1 Paperboard Machine (A1), a non-integrated uncoated recycled paperboard asset, in Austell, Georgia, by the end of March. It will also permanently close its containerboard and uncoated recycled paperboard mill in Fitchburg, Massachusetts, by the end of May.
About 70 positions are affected at each site, said TJ Struhs, director of corporate communications, via email. The company is helping affected employees explore other opportunities within the company, but it “will not be able to retain every colleague,” Struhs said. In addition, “every effort is being made to help colleagues navigate next steps including severance benefits and outplacement assistance,” he said.
“Decisions like these are extremely difficult because of the impact it has on our colleagues and their families, as well as the larger community,” President and CEO Ole Rosgaard said in a statement. “We believe strongly in the fundamentals of our business. These strategic actions will refine our participation in the market and help us maximize the profitability of our mill network and our overall business portfolio.”
Collectively, the closures will reduce Greif’s containerboard capacity by 100,000 tons and its URB capacity by 90,000 tons. Customer business will be transferred to other locations across Greif’s network, Struhs confirmed. The Austell facility will continue to run two paper machines — A2 and Sweetwater — and will retain 190 employees, he said.
Greif said it decided to shut down the A1 machine due to increased costs and decreasing demand for its product in the major end-use markets of books, binders and furniture. It is closing the Fitchburg mill because of the combination of high operating costs and the need for significant capital investments at the site.
During a December investor day, executives provided more details about a cost reduction plan that involves cutting $100 million in costs over three years; full benefits are expected by the end of 2027.
The plan also includes a business reorganization with a greater focus on investing in the polymer segment; executives said polymers are less cyclical and more profitable than other segments such as metals and fiber.
At that time last month, Rosgaard said that Greif had delivered its best financials in its 147-year history, and the cost-reduction plan would poise the company for growth.
