Clearwater Paper expects to save $10 million a year by closing a plant in Oklahoma City and reducing operations in Neenah, Wis.
The company announced Tuesday it will lay off 131 employees in Oklahoma City and about 85 staff members in Neenah.
The Oklahoma City facility, which will be shuttered on March 31, converts giant rolls of tissue into packaged products such as paper napkins, paper towels and toilet paper.
Clearwater Paper is also discontinuing the use of two tissue machines in Neenah on Dec. 31. They have some of the highest costs in the company and an annual production capacity of 32,000 tons, according to a Clearwater Paper news release. Three other machines will remain and will be run by a staff of 315.
Gains at other company sites, including at Lewiston, have enabled the tasks being eliminated in the Midwest to be moved elsewhere without diminishing the volume of products Clearwater Paper produces, said company spokesman Matt Van Vleet.
The measures in the Midwest are part of a larger process Clearwater Paper is undergoing where it evaluates the efficiencies of different factories, making changes as needed.
“As an integral step in our overall strategy to optimize our operations through better asset utilization, we will be taking these difficult, but necessary, actions while delivering on our growth objectives,” said Pat Burke, group president for Clearwater Paper in a prepared statement.
Lewiston’s paperboard operations were identified as having some of the highest production costs in North America. Clearwater Paper is addressing that issue by pumping $160 million into a modernization project in Lewiston, where it employs 1,370.
Lewiston is home to Clearwater Paper’s largest manufacturing complex. It is the only place the company makes paperboard and tissue and converts tissue into packaged products.
In contrast, Oklahoma City and Neenah are much smaller. Oklahoma City can convert 22,000 tons of paper products annually. Lewiston’s capacity is 90,000 tons per year. It can cut and package everything Oklahoma City can, plus facial tissue.
Neenah will be able to make 55,000 tons of tissue annually in its new configuration, compared with Lewiston’s 190,000 tons. Neenah does make goods for hospitals, restaurants and airports, something Lewiston doesn’t do.
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