Caraustar Industries Announces Plant Closure and Production Curtailment

ATLANTA—Caraustar Industries, Inc. announced the permanent closure of its Richmond Paperboard mill in Richmond, Virginia, effective December 11, 2008. The Richmond mill is an uncoated recycled boxboard (URB) manufacturing facility with annual capacity of 49 thousand tons. Associated with this mill closure, the company will record a pre-tax charge of approximately $5.9 million, of which approximately $4.7 million will be non-cash. This rationalization is expected to generate an estimated $5.1 million in annual pre-tax savings. The closure of the Richmond mill will affect approximately 52 salaried and hourly employees. Caraustar will provide a comprehensive program of separation pay, benefits coverage and job assistance to the employees affected by the Richmond closure to facilitate their transition to alternate employment.

The company also announced that effective December 19, 2008 it will idle the Carolina Paperboard mill in Charlotte, North Carolina. The Carolina mill is a URB manufacturing facility with annual capacity of 62 thousand tons. The company will continue to monitor its product demand and expects to determine by the end of the first quarter 2009 when it will restart URB production at the Carolina mill.

Greg Bartlett, vice president, sales Mill Group, stated “Recession and declines in product demand necessitate that the company move aggressively to retain cost efficiencies and increase capacity utilization across its mill system. Strategic capital investments have enhanced our mill system and allowed for this further consolidation. We value our customer relationships and will continue to supply all of their needs from other Caraustar mills.”