Consolidation to improve airlaid performance.
Airlaid producer Buckeye Technologies will close its Delta, B.C., Canada airlaid nonwovens facility by the end of calendar 2012. The Memphis, TN-based company will work closely with its customers to continue to meet their needs by sourcing products currently produced at Delta from its facilities in Gaston County, NC and Steinfurt, Germany.
Buckeye chairman John Crowe attributed several factors to the closure. These include an unfavorable site location relative to customers and raw material suppliers, a strong Canadian dollar and low capacity utilization. “It is unfortunate that this closure will result in the eventual termination of employment for approximately 95 dedicated employees,” he said.
Buckeye has owned and operated the Delta facility since 1997. In the fall of 2010, the company consolidated its production from a two machine operation to one airlaid machine to improve profitability. While margins did improve following this consolidation, the plant's forecasted financial performance remains at an unacceptable level, Mr. Crowe added.
Buckeye expects to incur a non-cash asset impairment charge of about $15 million and $5 million in restructuring expenses between now and December 31, 2012. The closure is expected to generate about $30 million in cash over the next 18 months, primarily through the sale of land and buildings and a net reduction in working capital.