US-based paper and packaging company Westrock has revealed plans to permanently end operations at its mill in Panama City, Florida.

The Panama City mill employs around 450 people and produces 645,000t of containerboard, primarily heavyweight kraft, and fluff pulp a year.

Work at the mill is due to end by 6 June this year.

WestRock will switch the manufacturing of select grades of containerboard currently produced at the mill to its other facilities.

Following the closure, the company will provide employees at the facility with severance and outplacement assistance in line with its policy and labour union agreements.

WestRock CEO David Sewell said: “A decision to close a facility and impact the lives of our employees is never easy to make.

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“As we implement our plans to close the Panama City mill, we do so with great appreciation for the many contributions of the team there.

“We are committed to assisting our Panama City team with exploring roles at other WestRock locations and outplacement assistance.”

The decision to close the Panama City mill is part of WestRock’s efforts to maximise returns on its invested capital and increase its assets’ performance.

The company said that the mill would require ‘significant’ capital investment to maintain and improve, but that fluff pulp production is not a priority in WestRock’s strategy to focus on higher-value markets.

WestRock will divert the funds required to maintain the mill towards improving other key assets.

In February this year, the company posted a 12.5% net sales growth of $551m to $4.95bn for the first quarter of the fiscal year 2022 (FY22), which ended on 31 December.

The company’s paper, corrugated packaging and consumer packaging segments saw their sales rise by $262, $201m and $76m respectively during the quarter.