Clearwater Paper is restructuring its solid bleached sulfate (SBS) mill in Cypress Bend, Arkansas, leading to a reduction in both production and workforce size. The company cited market oversupply as the primary driver for these changes. The layoffs are part of a broader effort to improve operating rates and reduce costs.
What happened
Clearwater Paper announced a restructuring of its Cypress Bend mill, which includes halving production of solid bleached sulfate. The company is reducing its employee count as part of this restructuring.
How many employees affected
The downsizing affected approximately 70 employees. This includes roughly 50 layoffs and the elimination of 20 open positions. The mill previously employed 320 people. The layoffs were slated for the current week.
Why layoffs happened
The primary reason for the production cut and subsequent layoffs is a market oversupply of solid bleached sulfate, which has been impacting margins and cash flows. Clearwater Paper aims to improve operating rates and reduce costs in response to these market conditions.
Company background
Clearwater Paper produces quality bleached paperboard, consumer tissue, and wood products. The company has been exploring options to optimize its production capabilities, including potentially adding swing capacity for coated unbleached kraft at the Cypress Bend mill, a plan that is currently paused.
Industry impact
The production cut is expected to remove approximately 170,000 tons of SBS from the market, representing about 3.1% of the North American supply. This move follows a similar announcement by Smurfit Westrock. Analysts suggest that Clearwater’s curtailment should help rebalance the SBS market, though the action is currently considered temporary.
What's next
Clearwater Paper anticipates $8 million to $12 million in annualized cost savings from these changes. The company intends to return the mill to full production when SBS industry conditions improve or through an investment in swing CUK capabilities. A final decision on investing in swing capacity will be made in the future.
Source: packagingdive.com