Glatfelter May Sell Specialty Papers Division in Spring Grove
Paper producer Glatfelter, York, Pa., last week reported a net loss of $10.1 million, or $0.23 per share for the fourth quarter of 2017 compared with a net loss of $16.2 million, or $0.37 per share in the fourth quarter of 2016. Consolidated net sales totaled $399.9 million and $390.9 million for the three months ended Dec. 31, 2017 and 2016, respectively. Composite Fibers and Advanced Materials also saw increases in net sales.
“Our fourth-quarter operating performance reflects continued strength of our engineered materials businesses,” Glatfelter Chairman and CEO Dante C. Parrini said in a press release. “Composite Fibers delivered a 22 percent increase in operating income compared with the fourth quarter of 2016. Earnings were driven by strong volume growth of 18 percent, as well as improved operating efficiencies and cost optimization initiatives. Advanced Airlaid Materials grew operating profit by 9 percent over the fourth quarter a year ago with shipments up 2 percent. Demand for our airlaid products remains strong as this business brings new capacity to the market, with shipments from Fort Smith, Arkansas on schedule for the first quarter. Our fourth quarter’s results, on an adjusted earnings basis, also benefited from an unusually low effective tax rate of 6.7 percent.”
The same success could not be found in the Specialty Papers segment, which produces items such as envelopes, book publishing papers, postage stamps, playing cards and greeting cards. The earnings report said Specialty Papers’ net sales decreased $14.1 million, or 6.9 percent. Turbulent market conditions, coupled with operating inefficiencies, led to lower profitability, according to Parrini.
“For Specialty Papers, we are encouraged by recently announced price increases in uncoated free sheet and carbonless products while we remain focused on operational factors that are in our control,” he shared.
The future of Specialty Papers will, of course, be a central focus for Glatfelter’s board of directors and management team during its ongoing review process. One possible outcome may involve the sale of the division, including its location in Spring Grove, Pa.
According to Eileen L. Beck, Glatfelter’s vice president of human resources, the company has more than 750 employees at its Spring Grove facility. Specialty paper products are also manufactured at Glatfelter’s Chillicothe and Fremont mills, both located in Ohio. Chillicothe employs more than 1,000 people, and Fremont has about 45 employees.
Glatfelter executives stressed that the company is in the early stages of the process and there is no timeline for a decision.
In 2016, the paper maker completed expensive renovations to convert from coal to natural gas boilers. Via Glatfelter’s blog:
This $95 million investment won’t generate a conventional return, but it will help Glatfelter comply with current requirements, and be prepared for the future. The work across our mills in Pennsylvania and Ohio will support more than 2,300 jobs in the local economies where we live and work.
When the conversion project was initially announced then-Gov. Tom Corbett said the initiative “secures—for decades to come—good-paying jobs for the employees of Glatfelter, a major economic contributor in York County for 150 years.”
This isn’t the first round of bad news for the Specialty Papers business unit. Just last summer, Glatfelter announced the layoff of approximately 120 jobs, including 30 at its Spring Grove plant. Again, waning consumer demand and cost inefficiencies were cited as the cause.
Print+Promo will continue to monitor this story as it develops.