Tissue producer Cascades to shut two paper machines and converting plants

The fourth-largest tissue maker in North America will remove around 100,000 tons/yr of tissue capacity starting July 2023

Cascades will shut three of its underperforming US tissue plants including two paper machines with about 100,000 tons/yr of capacity starting in July 2023 at about the time as the company ramps up its new recycled containerboard machine in Ashland, VA. The fourth-largest tissue maker in North America announced this week that it will close its Barnwell, SC, and Scappoose, OR, tissue paper complexes, as well as a virgin tissue PM at its St. Helens, OR, mill.

Machines had been operating below capacity

The equipment slated for closure, which have a combined total annual rated capacity of 92,000 tons/yr of tissue paper and 10 million cases of converted product, have been operating below capacity, according to a release from Cascades announcing the closures. The 56,000 tons/yr of tissue paper and 5 million cases of converted product the plants made in 2022, mostly on the West Coast, was a 39.1%, or 36,000-ton decrease vs paper machine capacity at the St. Helens complex.

Closure costs, including severance, are expected to total about $20 to $25 million. About 300 jobs will be affected. Cascades is expected to release its first-quarter earnings results on May 11, as well as to provide additional details on the closures during the quarterly call with analysts next month.

“With fewer sites, better resource allocation, and a strong business strategy, we believe this decision will position Cascades to create more value for its shareholders and customers. I’m convinced that the steps taken today will allow us to achieve our objectives for improving Tissue Group’s performance,” said Cascades pres/CEO Mario Plourde, in a release on Apr. 25.

Barnwell and Oregon plants

The South Carolina paper machine and converting plant has been in Cascades’ hands for four years since Cascades acquired Orchids Paper Products in mid-2019 for $207 million. The mill in 2019 had just started up a new technology 35,000 tons/yr Valmet QRT tissue machine in Barnwell.

In addition to Barnwell, Orchids had invested $240 million in the five years leading up to 2019, including on a tissue PM in Pryor, OK. Orchids’ parent roll capacity was estimated at up to 114,000 tons/yr and its converting capacity at up to 114,500 tons/yr, according to Cascades, at the time of its purchase.

The Barnwell mill produced about 35,000 tons/yr of recycled tissue bath and toweling, using nearly 41,500 tons/yr of heavy print solid bleached sulfate, according to Fastmarkets’ Mill Asset Database.

The Orchids acquisition made Cascades the fourth largest tissue maker by capacity in North America, behind Georgia-Pacific, Kimberly-Clark, and Procter & Gamble.

In Oregon, Cascades acquired the Scappoose tissue paper converting plant in 2017. At the company’s St. Helens plant, Cascades will shutter the virgin tissue PM, which produced about 65,000 tons/yr of retail bath, towel, and napkin products. The mill, built in 1926, makes about 120,000 tons/yr total of tissue products, including Away-from-Home (AfH) napkin and toweling. The St. Helens, OR, mill will still make AfH products.

The St. Helens plant recently had been shut down for some time. Cascades temporarily halted production on one of the PMs at the St. Helens, OR, mill for the entire fourth quarter of 2022. The PM had resumed production on Feb. 10.

“A portion of this production will be absorbed by open capacity at our other facilities and by the increase in productivity at our sites, particularly in the United States,” Cascades said in the release. “Cascades has the option to evaluate the possibility of redeploying the seven conversion lines impacted by this decision to other sites at a later date.”

Recycled containerboard machine startup?

In Virginia, contacts this week said Cascades’ startup of its new recycled containerboard machine in Ashland will start up sometime in May. Initially set for a year-end 2022 opening, the Bear Island project has been pushed ahead into second quarter 2023.

“It’s May. We’ll call it a soft opening at best,” a contact told Fastmarkets’ PPI Pulp & Paper Week on Apr. 28.

The Bear Island project is one of several recycled containerboard mills planned for startup in 2023. Domtar started up a machine in Kingsport, TN, in mid-January and Atlantic Packaging started a PM in February. A fourth machine was started up, by ND Paper at its Biron mill in Wisconsin. Although contacts this week said Biron’s startup was set more for May, like Cascades’ Ashland mill.

4Q tissue sales stable

In its last earnings call on Feb. 23, when Cascades reviewed the company’s fourth-quarter 2022 results, Cascades’ CEO Plourde said the company forecasts that its tissue segment will improve.

“Our outlook for tissue is for quarter results to improve sequentially and to be significantly above prior year levels. This stronger outlook reflects more favorable raw material prices, higher average selling prices and good demand for the retail tissue, partially offset by softer demand in the away-from-home products,” Plourde said. Tissue sales were stable sequentially in the fourth quarter.

This article was first published in PPI Pulp & Paper Week, the industry’s most trusted pulp and paper market news and prices for North America. Speak to our team to find out more and subscribe to our newsletters.

What to read next
The linerboarprice drops are a result of discount deals emerging in the North American linerboard market
Multifamily housing starts show some sign of life in late 2023, but the overall picture shows a different trend when compared to single-family
Despite slower population growth and lower household formation rates, there remains a shortfall in the housing market, particularly for starter homes in North America
Despite a modest slowdown in new orders, the demand for tropical hardwoods remains robust in North American markets, particularly in high-end projects and exterior applications, with supply issues varying across different species and specifications.
Fastmarkets interviews Jeremy Harrison, Saskatchewan’s trade and export minister, about why the province is investing in rare earths processing
Fastmarkets hosted an insightful webinar on the future of southern yellow pine and its potential impact on the North American lumber industry. For those who missed it, here's a breakdown of the key takeaways