The move will enable WestRock to increase the return on invested capital and boost the asset performance

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The Panama City mill has a combined annual capacity of 645,000 tons. (Credit: Lehoo88 from Pixabay)

US-based paper and packaging company WestRock announced its decision to permanently terminate operations at its paper mill in Panama City, Florida.

WestRock plans to end the operations and shut down the mill by 6 June 2022.

With a total annual capacity of 645,000 tonnes, the mill manufactures containerboard, predominantly heavyweight kraft, and fluff pulp. Certain grades of containerboard that are now made in the mill will be manufactured at other WestRock plants.

The move will enable WestRock to increase the return on invested capital and boost the asset performance.

According to the firm, the mill will require significant capital investment for maintenance and development in the future.

Furthermore, the company’s strategy of focusing on higher-value markets does not prioritise the manufacture of fluff pulp.

The firm will divert these funds to upgrade other important assets.

WestRock chief executive officer David Sewell said: “A decision to close a facility and impact the lives of our employees is never easy to make.

“As we implement our plans to close the Panama City mill, we do so with great appreciation for the many contributions of the team there.

“We are committed to assisting our Panama City team with exploring roles at other WestRock locations and outplacement assistance.”

Around 450 people are employed at the Panama City mill. The mill’s employees will be provided with severance and outplacement assistance in accordance with company policy and labour union agreements.

Earlier this year, WestRock announced its plans to construct a new corrugated box facility in Washington, US.

WestRock supports clients with differentiated, sustainable paper and packaging solutions in a variety of industries, including beauty and personal care, beverage, food, food service, healthcare, retail and others.

The firm employs around 50,000 people and has over 320 production plants, design centres, research laboratories, and sales offices across the world.