Timothy McKenna (investors), 312/580-4637 or 314-746-1254
George Csolak (media), 314-746-1321
Smurfit-Stone Announces Closure of York Containerboard Mill
CHICAGO, June 20, 2000 - Smurfit-Stone Container Corporation (Nasdaq: SSCC) today announced its intention to discontinue operations at its York, PA, containerboard mill.
The mill has a capacity to produce about 130,000 tons of corrugated medium, but has been idle since February 15, 2000, due to market conditions. Smurfit-Stone made the determination to discontinue operations at York following its recent review of future needs.
The closing of the facility will result in a pre-tax restructuring charge of approximately $35 million, or $.09 per share after tax, in the second quarter. Smurfit-Stone also confirmed that it will take approximately 180,000 tons of economic downtime at its containerboard mills during the second quarter, which will have an unfavorable impact of approximately $.10 per share.
"We reviewed our system in light of market requirements and have decided we can meet our internal demand as well as the needs of our customers without the York facility," said Ray M. Curran, president and CEO of Smurfit-Stone. "We continue to review our containerboard operations as we evaluate market needs," Curran added.
The company deferred a decision on the future of the York mill for four months, but market conditions, which led to the economic downtime, have not improved, Curran said. "As with other closures, this action will cause us to lose many highly capable people, which is both regrettable and unavoidable," Curran said. The York mill employs 106 people - 23 salaried and 83 hourly. Details regarding severance and other issues for the hourly employees are currently being negotiated with representatives of the Paper, Allied-Industrial, Chemical & Energy Workers' Union.
Smurfit-Stone's total paperboard capacity is approximately 7.5 million tons, following the York mill closure.
Smurfit-Stone Container Corporation is the premier manufacturer of paper- and paperboard-based packaging. Smurfit-Stone holds industry-leading positions in the production of containerboard (including white-top and recycled medium), corrugated containers, industrial bags, and clay-coated recycled boxboard; and is the world's largest paper recycler. In addition, Smurfit-Stone is a leading producer of folding cartons, solid bleached sulfate, paper tubes and cores, and labels. The company operates more than 300 facilities worldwide and employs approximately 40,000 people.