ALPHARETTA, Ga. -- Neenah Paper today announced plans to permanently close its fine paper mill located in Ripon, California. Operations at the mill, which has one paper machine with an annual capacity of approximately 35,000 tons, will be phased out in an orderly manner over the next two months. Production previously made at Ripon will be absorbed by the company's other premium fine paper mills.

"This decision is consistent with our strategy to drive consolidation in the premium fine paper category through leading brands and a cost efficient manufacturing platform. Closing the Ripon mill allows us to significantly reduce costs and simplify our supply chain without compromising our ability to serve our customers," said John O'Donnell, President - Fine Paper. "The employees at Ripon have done an outstanding job this year, working safely and efficiently despite reduced schedules that have resulted from lower market demand. We will now focus on assisting these employees through this difficult transition as well as marketing the site to potential buyers."

The closure is expected to result in a pre-tax charge to earnings of approximately $17 million in the second quarter comprised of $6 million in non-cash charges, primarily for the write-down of production assets at the Ripon facility, and $11 million related to cash payments for contract terminations, severances and other employee costs. Approximately $7 million would be paid in 2009, with remaining payments in 2010 and beyond.

In addition to future proceeds from selling the Ripon site, expected benefits include annual cash savings of over $7 million as a result of reductions in fixed costs and improved distribution and manufacturing efficiencies.