Readers report steam coming from closed Tacoma paper mill. Here’s what is going on
While the Tacoma WestRock paper mill officially closed in September, the plant itself is not yet completely dormant.
Readers have asked about steam venting from the Tideflats mill in the weeks following the closure. One reader noted in early October that the mill appeared to still be operating and “steaming as much as ever.”
More “steam sightings” from readers have been logged through November and as recently as Wednesday (Nov. 22).
Robby Johnson is senior manager of corporate communications with Atlanta-based WestRock. He told The News Tribune on Tuesday in response to questions that while its paper operations are over, not all mill decommissioning is completed.
“The mill is not making paper and is being prepared for sale,” Johnson said via email. “The boiler hasn’t been fully shut down, which is why there is visible steam venting.”
No further details were shared.
Jessica Wilson, a Tacoma Public Utilities media representative, said Tuesday that TPU had not “heard from WestRock in terms of a final shutdown date.”
WestRock announced in August it planned to close the longtime paper mill by the end of September. The mill, 801 E. Portland Ave., was built in 1929, according to county records. With WestRock as its most recent owner-operator, it employed about 400 people.
Johnson at the time said, “We have reviewed all options and designed our shutdown plan so that, once complete, the Tacoma site will be ready for sale.”
The company blamed “high operating costs and the need for significant capital investment” as the determining factors for the closure. Also this year, WestRock closed its North Charleston, South Carolina, mill in June.
The closures were part of an ongoing consolidation/restructuring initiative that included other U.S. mill-related sell-offs.
In 2022, the company closed its Panama City, Florida mill and ended corrugated manufacturing operations at its St. Paul, Minnesota site.
In December 2022, the company completed its purchase of Grupo Gondi, a producer of fiber-based sustainable packaging in Mexico, for $969.8 million in cash and the assumption of debt.
The purchase included four paper mills, nine corrugated packaging plants and six high-graphic plants throughout Mexico.
At the time, the company said the Grupo Gondi acquisition would “enhance the company’s leading position in the growing Latin American containerboard, paperboard and consumer and corrugated packaging markets.”
Planned merger, annual report, mill closure details
WestRock’s annual report to the Securities and Exchange Commission filed Nov. 17 included more information on its mill closures and an expected $11 billion buyout by a European rival. The report covered the company’s fiscal year ending Sept. 30.
In September, Dublin-based Smurfit Kappa, a folding paperboard box manufacturing company, and Westrock entered into a transaction agreement that will create Smurfit WestRock.
JP Morgan estimated the new entity would have market shares of around 20% in the corrugated-packaging market in Europe and North America, according to Reuters.
The deal is expected to close in the second quarter of next year.
WestRock stated in its annual report that by closing its Tacoma, North Charleston, Panama City and St. Paul mills, “significant capital that would have been required to keep the mills competitive in the future is expected to be deployed to improve key assets.”
The report also stated the company would “likely incur additional restructuring costs and may not realize expected benefits from restructuring.”
“We have restructured portions of our operations from time to time, have current restructuring initiatives taking place, and it is likely that we will engage in future restructuring activities,” the company stated.
It noted “various impairments and other charges” associated with ending operations in Tacoma and North Charleston container-board mills.
“Because we are not able to predict or control market conditions, including changes in the supply and demand for our products, the loss of large customers, the selling prices for our products or our manufacturing costs, we may not be able to predict the appropriate time to undertake restructurings,” it added.
The report noted that the costs of a mill closure generally is “more significant than that of a converting facility due to the size and complexity of a mill decommissioning process and higher level of investment.”
“Restructuring activities may divert the attention of management, disrupt our operations and fail to achieve the intended cost and operations benefits,” the company added, though noting underlying assumptions “may change as additional information becomes available or facts or circumstances related to restructuring initiatives change.”
Looking into the next year, the company said it expected “to further progress on cost savings initiatives and are targeting $300 to $400 million in cost savings in fiscal 2024.”
