ALPHARETTA, Ga., March 7 /CNW/ -- Neenah Paper (NYSE: NP) today announced
plans to close permanently one of the fine paper plants acquired in the recent
purchase of Fox River Paper. The Housatonic mill, located near Great
Barrington, Massachusetts, has annual production capacity of approximately
15,000 tons per year and is expected to cease manufacturing operations by the
end of the second quarter. Housatonic was the smallest of four fine paper
plants Neenah acquired as part of the Fox River acquisition.
"This is a necessary part of our plan to integrate Fox River in a manner
that will result in a competitive long term cost structure for our combined
operations. The Housatonic mill was not profitable due to its small size,
cost structure and pricing of many of the grades made there. Closing the mill
allows us to eliminate costs and improve margins while still serving the needs
of key customers," said Sean Erwin, Chairman and Chief Executive Officer.
"Selected products made at Housatonic will be produced at our other sites,
where we have available capacity and the ability to make these grades at a
lower cost. We realize this decision will result in hardship for our
employees at Housatonic and the local community and will be working to assist
them through this difficult transition."
The company said it expected to incur one-time cash costs of
approximately $3 million for severances and other charges related to the
closure. Ongoing annual savings of approximately $5 million are expected from
the elimination of fixed costs and increased manufacturing efficiencies,
although these savings would not be realized immediately due to product
transition costs expected to be incurred in 2007.
About Neenah Paper, Inc.
Neenah Paper manufactures and distributes a wide range of premium and
specialty paper grades, with well-known brands such as CLASSIC(R),
ENVIRONMENT(R), STARWHITE(R), ESSE(R), KIMDURA(R) and MUNISING LP(R),
Gessner(R) and varitess(R). The company also produces and sells bleached
pulp, primarily for use in the manufacture of tissue and writing papers.
Neenah Paper is based in Alpharetta, Georgia, and has paper manufacturing
operations in the United States and Germany, and a pulp mill and related
timberlands in Nova Scotia, Canada. Additional information about Neenah Paper
can be found at the company's web site at www.neenah.com.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release may constitute "forward-looking"
statements as defined in Section 27A of the Securities Act of 1933 (the
"Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the
"Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the
"PSLRA"), or in releases made by the Securities and Exchange Commission, all
as may be amended from time to time. Statements contained in this press
release that are not historical facts may be forward-looking statements within
the meaning of the PSLRA. Any such forward-looking statements reflect our
beliefs and assumptions and are based on information currently available to us
and are subject to risks and uncertainties that could cause actual results to
differ materially including, but not limited to, changes in U.S./Canadian
dollar, U.S./Euro and other currency exchange rates, changes in pulp prices,
the cost or availability of raw materials, unanticipated expenditures related
to the cost of compliance with environmental and other governmental
regulations, the ability of the company to realize anticipated cost savings,
and the successful integrations of the former Fox River business and Neenah
Germany operations. Forward-looking statements are only predictions and
involve known and unknown risks, uncertainties and other factors that may
cause our actual results, performance or achievements, or industry results, to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. We undertake no
obligation to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise. These cautionary
statements are being made pursuant to the Securities Act, the Exchange Act and
the PSLRA with the intention of obtaining the benefits of the "safe harbor"
provisions of such laws. Neenah Paper, Inc. cautions investors that any
forward-looking statements we make are not guarantees or indicative of future
For further information:
For further information: Bill McCarthy, Vice President - Financial
Analysis and Investor Relations, +1-678-518-3278, of Neenah Paper, Inc. Web