Georgia-based Neenah Paper will shutter its production site in Appleton, WI sometime in September.
The decision to close the site, which makes media for filters used in transportation, such as air or oil filters, was one of several actions the company is taking to accelerate revenue growth and profitability. The company will also invest $13 million in new release liner coating capacity in support of its growing specialty coatings business and the recent ITASA acquisition and restart an idled Fine Paper & Packaging asset in support of its premium packaging business.
“These actions will drive accretive value and accelerate efforts toward our long-term revenue growth goal of 5% annually with strong, consistent margins. Both the investment in coating capacity for release liners and the start-up of an idled asset in support of premium packaging are aligned with our strategy to extend our capabilities into larger, growing markets with customers that value unique, premium solutions,” says Julie Schertell, president and CEO. “Closing a facility is always a difficult decision and not one we take lightly. This decision is not a reflection of our employees or their efforts, as the team has consistently worked hard to overcome obstacles, improve safety and drive results. We'll continue to provide innovative filtration solutions and serve customers from our other manufacturing facilities in Europe and North America.”
Schertell added, “I’m confident these footprint changes will unlock immediate value for our shareholders as we continue to transform Neenah into a faster growing, more profitable company. We remain focused on investing for growth, maintaining a strong balance sheet and providing meaningful shareholder returns.”
Financial implications associated with the closure of the Appleton facility include an estimated annual EBITDA benefit of $7 million to $8 million, excluding estimated one-time cash closure costs of $5 million to $6 million and one-time non-cash charges of approximately $45 million. Annual revenues are estimated to decrease by $20 million to $25 million from the closure. The facility is expected to be closed by the end of the third quarter of 2021.
