Greif Announces Strategic Actions
Rhea-AI Summary
Greif (NYSE: GEF), a global industrial packaging company, announced the permanent closure of two production facilities. The company will cease operations of the Number 1 Paperboard Machine (A1) in Austell, GA, and close its containerboard and uncoated recycled paperboard (URB) mill in Fitchburg, MA. These strategic actions will impact approximately 140 positions and reduce the company's containerboard capacity by 100,000 tons and URB capacity by 90,000 tons.
The closure of A1, a non-integrated URB asset, is attributed to increased costs and declining demand in furniture, books, and binders markets. The Fitchburg mill closure decision was driven by high operating costs and required significant capital investment. Production will cease at A1 by the end of March 2025 and at Fitchburg by May 2025. The company will provide severance benefits and outplacement assistance to affected employees.
Positive
- Strategic reduction in production capacity to maximize mill network profitability
- Cost reduction through closure of high-operating-cost facilities
- Avoidance of significant capital investment requirements at Fitchburg mill
Negative
- Reduction of 100,000 tons in containerboard capacity
- Reduction of 90,000 tons in URB capacity
- Loss of approximately 140 jobs
- Declining demand in major end-use markets
News Market Reaction – GEF
On the day this news was published, GEF gained 0.41%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
DELAWARE, Ohio, Jan. 29, 2025 (GLOBE NEWSWIRE) -- Greif (NYSE: GEF, GEF.B), a global leader in industrial packaging products and services, announced today it will permanently cease production on the Number 1 Paperboard Machine (A1) in Austell, GA and permanently close the containerboard and uncoated recycled paperboard (URB) mill in Fitchburg, MA.
“Decisions like these are extremely difficult because of the impact it has on our colleagues and their families, as well as the larger community,” said President and CEO Ole Rosgaard. “We are grateful to our colleagues in Austell and Fitchburg for their contributions to the company and are committed to helping them navigate next steps by providing severance benefits and outplacement assistance.”
In total, approximately 140 positions will be impacted. Ceasing production at A1 – a non-integrated URB asset for the company - is a result of increased cost and declining demand in its major end use markets of furniture, books, and binders. The combination of high operating costs and the need for significant capital investment were the determining factors in the decision to close the Fitchburg mill. Together, these actions will reduce the containerboard capacity of Greif’s mill network by 100,000 tons, and URB capacity by 90,000 tons.
“We believe strongly in the fundamentals of our business. These strategic actions will refine our participation in the market and help us maximize the profitability of our mill network and our overall business portfolio” said Rosgaard. The company expects to cease production on the A1 asset by the end of March 2025 and Fitchburg by May 2025.
About Greif
Greif is a global leader in industrial packaging products and services and is pursuing its vision: being the best customer service company in the world. The Company produces steel, plastic and fiber drums, intermediate bulk containers, reconditioned containers, jerrycans and other small plastics, containerboard, corrugated sheets and products, uncoated recycled paperboard, coated recycled paperboard, tubes and cores and a diverse mix of specialty products. The Company also manufactures packaging accessories and provides other services for a wide range of industries. In addition, Greif manages timber properties in the southeastern United States. The Company has a workforce of over 14,000 colleagues spread across more than 250 facilities in 37 countries to serve global as well as regional customers. Additional information is on the Company's website at www.greif.com.
Media Contact
TJ Struhs
Director, Corporate Communications
tj.struhs@greif.com | +1 (207) 956-2304
