WestRock closing South Carolina paper mill

WestRock Co. announced last week it will permanently shut down operations at its paper mill in North Charleston, South Carolina, at the end of August, affecting approximately 500 employees.

The Atlanta-based paper and packaging producer cites high operating costs and the need for significant capital investment as determining factors in the decision to cease operations at the mill, which has been operating in North Charleston for 86 years. WestRock acquired the mill in 2018 with its purchase of then-owner KapStone Paper and Packaging Corp.

“WestRock and its predecessor companies have had a long history in the region operating the North Charleston mill and the contributions of the team members over the years have been greatly appreciated,” CEO David B. Sewell says, noting the company is committed to assisting employees with exploring roles at other WestRock facilities and outplacement assistance.

The North Charleston mill produces containerboard, uncoated kraft paper and unbleached saturating paper with a combined annual capacity of 550,000 tons. WestRock says containerboard and uncoated kraft currently produced at the mill will be manufactured at other WestRock facilities, while the company plans to exit the unbleached saturating kraft paper business when the mill shutdown is complete.

WestRock reconfigured the North Charleston mill in late 2019 and early 2020, hoping to improve the mill’s operating efficiency and long-term competitiveness. The reconfiguration included the permanent shut down of one of the site’s three paper machines, which eliminated about 288,000 tons of linerboard capacity, and the elimination of about 260 positions over a five-month period.

“Closing our North Charleston mill is another step in our ongoing portfolio optimization strategy,” Sewell says in a statement accompanying WestRock’s second quarter earnings report. “We are accelerating our efforts to streamline our operations and drive growth in the most attractive markets. Looking ahead, we remain committed to operating world class assets and investing our capital to drive the greatest returns.”

WestRock says the North Charleston mill officially will cease operations Aug. 31.

In its 2021 sustainability report, WestRock indicates its U.S. mills consumed 33.1 million tons of virgin wood fiber compared with about 5.6 million tons of recovered fiber. The company’s announcement does not refer to any recycled-content grades having been made in North Charleston, and its website lists extensive forestry management partnerships in the Carolinas.

This is the third shutdown in little less than a year for WestRock, which closed its corrugated medium manufacturing operations at its St. Paul, Minnesota, recycled paper mill last November and closed its containerboard mill in Panama City, Florida, last June. Similar to the North Charleston site, the company at the time of each announcement said both operations required significant capital investment.

The closure of the corrugated medium operations in St. Paul, specifically, have caused headaches for recyclers in the Midwest. In January, Shannon Dwire, president of Sioux Falls, South Dakota-based Millennium Recycling, told Recycling Today there was excess cardboard “anywhere you turn.”

“A lot of places don’t have anywhere to go if they didn’t have anything but WestRock [to sell to] before,” she said.

“There’s a lot of tonnage that went back into the market … and anything that wasn’t secured by a contract didn’t move, from what I can tell—especially as you get into the Dakotas and in more rural areas of Minnesota and into Iowa.”

Since January, however, old corrugated containers (OCC) pricing has seen a bit of a rebound, though according to Fastmarkets RISI’s Pulp & Paper Week for May 5, prices remain well below year-ago pricing when the U.S. averaged $121 per ton for OCC in May 2022.

The national average OCC price currently is $41 per ton and has increased $12 per ton since January.