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IP Shuts Down Board Machine

International Paper (IP) plans to shut down its No. 2 paper machine at the Albany mill in Oregon as of Oct. 5, for a minimum of three months. This machine produces approximately 250,000 tons annually of containerboard. Approximately 40 jobs will be impacted by the shutdown.

“We don’t underestimate the impact that this has on the employees who will be laid off as a result of this decision, and we’re committed to working closely with the union and local agencies to provide outplacement benefits and other assistance,” says Glenn Landau, vice president and general manager of IP's Containerboard & Recycling business. “This is a necessary near-term decision made in light of continuing high input costs, current economic conditions, and our commitment to match our production to our customers’ needs.”

Landau said the company will continue to monitor economic conditions as they evolve and will revisit the operating status of the machine early in 2009.

Prior to the shutdown of Albany No. 2, IP’s North American containerboard production is about 11 million tons per year.

“This closure won’t boost prospects for a $60 per ton containerboard price hike,” says Mark Wilde, paper industry analyst, Deutsche Bank, New York City, in an email report. “Was the closure triggered by the loss of box business? It is possible. IP has been renegotiating Weyerhaeuser box contracts and warned of volume losses.”