Aug. 26, 2008 - Wausau Paper yesterday said that it will permanently shut down paper machine number 10, one of the two paper machines at its Specialty Products mill in Jay, Maine on or prior to December 31, 2008 in response to dramatically increased input costs and difficult market conditions.

Number 10 paper machine, with a capacity of 40,000 tons annually, presently serves the release liner market and a variety of smaller niche markets.

The shutdown is expected to impact approximately 150 of the 235 employees currently at the facility, Wausau said.

"While the release liner market remains a strategic focus for Wausau Paper, the high cost structure of the liner machine at our Otis mill has made it uncompetitive in today’s business environment,” said Thomas J. Howatt, Wausau Paper's president and CEO.

“While we regret the impact this decision will have on so many of our dedicated and loyal employees, it is a decision made in keeping with our commitment to address underperforming areas of our business and to deliver acceptable returns to our shareholders," Howatt added.

Wausau said pre-tax charges associated with the shutdown of number 10 paper machine are estimated to be $10 million with non-cash charges, primarily related to the write-down of long-lived assets, accounting for approximately $6 million of this total. Pre-tax closure charges of $3 million are expected in the third quarter with remaining charges occurring during the fourth quarter. After considering income taxes and an anticipated reduction in working capital, the impact of the shutdown is expected to be cash-neutral on a cumulative basis.

Wausau Paper, with record revenues of $1.2 billion in fiscal 2007, produces and markets fine printing and writing papers, technical specialty papers, and "away-from-home" towel and tissue products.

SOURCE: Wausau Paper