Westvaco to Close Packaging Plants, 430 Jobs to Be Cut
Press release from the issuing company
STAMFORD, Conn. Sept. 6, 2001--Westvaco Corporation announced today that it will close packaging plants in Richmond, VA, and Memphis, TN, by mid-November. The company will further streamline its Richmond packaging operations by relocating equipment to other company facilities to gain efficiencies and to support the company's growth in targeted markets.
The Richmond and Memphis plants produce packaging for a wide variety of consumer products. The products and services at these plants will continue to be produced at other Westvaco locations. The company's actions will affect approximately 350 employees in Richmond and 80 in Memphis.
"Initiatives to increase efficiency, reduce costs and maximize the value of assets are essential to support our growth in targeted global markets,'' said Richard H. Block, President of Westvaco's Consumer Packaging Group. "Realigning our consumer packaging operations positions us for greater profitability and faster expansion as a leading supplier of high-value packaging.''
On August 31, Westvaco announced plans to close a paper mill in Tyrone, PA, by the end of October. Closing the paper mill, restructuring consumer packaging operations and other actions will result in an estimated $65 million pretax charge against fiscal fourth quarter earnings. The company expects that activities covered by the charge will result in about $60 million a year in pretax annual savings.
Last week, Mead Corporation and Westvaco agreed to a merger of equals. The transaction will create a global company with an enterprise value of $10 billion and leading positions in markets for packaging, coated and specialty papers, consumer and office products and specialty chemicals. The new company, MeadWestvaco Corporation, will have $8 billion in annual sales and expects to achieve annual operating synergies of more than $325 million by the end of two years of combined operation. The two companies expect the merger to close before the end of the year.
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