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Buckeye plans to close B.C. nonwovens facility next year


September 6, 2011
By Pulp & Paper Canada

Buckeye Technologies Inc. plans to close its Delta, B.C., airlaid nonwovens facility by the end of calendar 2012. Products currently produced at Delta will be sourced from its facilities in Gaston County, N.C. and Steinfurt, Germany.

Buckeye Technologies Inc. plans to close its Delta, B.C., airlaid nonwovens facility by the end of calendar 2012. Products currently produced at Delta will be sourced from its facilities in Gaston County, N.C. and Steinfurt, Germany.

Buckeye Chairman John B. Crowe said, “This closure has become necessary due to several factors including 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.

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Buckeye has owned and operated the Delta facility since 1997. In the fall of 2010, the company consolidated production from a two-machine operation to one airlaid machine in an attempt to improve the profitability of the site. “Even after this consolidation, which did improve margins, the plant’s forecasted financial performance remains at an unacceptable level,” reports Crowe.

Buckeye announced in June that the Delta facility would close by the end of 2012, allowing an 18-month period for it to implement changes that may be needed at Gaston and Steinfurt to meet the needs of current Delta customers.

Buckeye expects to incur a non-cash asset impairment charge of about US$15 million and US$5 million in restructuring expenses between now and December 31, 2012. The closure is expected to generate about US$30 million in cash over the next 18 months, primarily through the sale of land and buildings and a net reduction in working capital.

Buckeye is a manufacturer and marketer of specialty fibres and nonwoven materials, headquartered in Memphis, Tenn.


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