Paper mill planning shutdown for repair.
International Paper on Friday will begin a seven-week shutdown of its Springfield containerboard mill to rebuild the plant's boiler, according to a spokeswoman at the company's Memphis headquarters.
The down time will begin Oct. 23, and the mill will start gearing up again for production on Dec. 14, the spokeswoman, Amy Sawyer, said.
Most of the mill's 240 employees will continue to work through the down time, except for 114 hourly workers who will be laid off for the week of Thanksgiving, she said.
Sawyer added that as many as 38 hourly employees also could be laid off the week after Thanksgiving.
To minimize layoffs, most of the boiler repair work will be conducted by mill employees, rather than by contract laborers, she said.
"The end goal is to keep as many of our employees working during the outage as possible," Sawyer said.
Greg Pallesen, vice president of AWPPW, the union that represents hourly workers at International Paper's Springfield mill, said workers will receive holiday pay for Thanksgiving and many have vacation days they could draw on for the rest of the layoff.
The planned down time at the Springfield mill will be the longest in recent memory, Sawyer said.
Maintenance shutdowns can last from two weeks to much longer, depending on the project to be completed, she said.
The mill will be taking extended down time at a time when the pulp and paper industry is struggling in the global economic downturn.
"The main driver of the business is corrugated box shipments," said Will Mies, an editor at Pulp & Paper Week, an industry trade publication based in San Francisco.
Corrugated boxes are made of containerboard, which refers to linerboard, the smooth sides of shipping packages, and corrugated medium, the wavy material sandwiched between layers of linerboard.
Corrugated box shipments January through September were down 9.8 percent compared with the same period last year, Mies said.
Producers have been trying to match supply with customer demand, so industry inventories have remained quite low, he said.
"Producers have been taking these temporary curtailments at a lot of mills this year - especially in the first half of the year," Mies said. "And they sort of kept the market in balance."
Industry watchers are keeping a close eye on International Paper - North America's largest containerboard producer - and its closest competitor, Smurfit-Stone, because buyers and analysts speculate that 1.5 million to 2 million tons of U.S. containerboard capacity will be shut down in the fourth quarter and possibly into the first quarter of next year, Pulp & Paper Week has reported.
Smurfit-Stone has headquarters in Chicago and Creve Coeur, Mo.
International Paper is taking the longer-than-usual down time at the Springfield mill to repair the boiler; it is not related to general business conditions, Sawyer, the International Paper spokeswoman, said.
As for the long-term prospects of the Springfield mill, Sawyer said International Paper continually looks for ways to be more competitive.
"That doesn't translate to any specific plans at this point, but the team at Springfield is working hard to reduce costs, improve efficiencies and reliability, and match our production to our customer demand," she said.
Sawyer declined to disclose how much International Paper is spending on the boiler improvements in Springfield.
But some view the company's capital investment in the mill as a positive sign.
International Paper acquired mills in Springfield and Albany along with 112 other sites from Weyerhaeuser Co. for $6 billion in August 2008.
Last October, International Paper idled the No. 2 paper machine at the Albany mill, laying off 40 employees. About 230 employees continue to work at the Albany plant, Sawyer said.
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|Title Annotation:||Business; Most employees at the Springfield plant will continue working while a boiler is fixed|
|Publication:||The Register-Guard (Eugene, OR)|
|Date:||Oct 17, 2009|
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