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Glatfelter exploring sale of specialty papers division

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Glatfelter's Spring Grove factory.
Glatfelter's Spring Grove factory. - (Photo / )

A York County maker of paper goods is exploring the sale of its largest business unit, which includes factory operations in Spring Grove.

Glatfelter, which has its corporate headquarters in York, is reviewing its specialty papers unit and exploring options that could include a sale of the division. No timeline was given.

Specialty papers has been wrestling with inefficiencies and a declining profit margin, according to the company.

Along with the facility in Spring Grove, the unit also includes a plant in Fremont, Ohio and Chillicothe, Ohio, according to the company. 

In a statement, vice president of human resources Eileen Beck said Glatfelter is looking at “strategic alternatives” for the specialty papers unit, which it believes will “benefit from stewardship that continues to invest in improving the business with a strategy that singularly focuses on Specialty Papers’ many strengths and attributes.”

The company, which is more than 150 years old, has deep roots in York County, where it began operations. 

“This was not an easy decision, especially given the strong heritage of Specialty Papers and the long-standing relationships with our communities,” Beck said. 

The news comes on the heels of the company’s fourth quarter earnings report released Tuesday, in which Glatfelter CEO Dante Parrini said the specialty papers division continued to face a challenging market conditions and lower profitability.

The specialty papers division saw a 6.9 percent dip in sales: from $204.7 million in the fourth quarter of 2016 to $190.1 million in fourth quarter 2017.

Glatfelter’s specialty papers unit employs 1,795 of the 4,200 people the company employs worldwide. The Spring Grove plant has 750 workers. In July, Glatfelter laid off 70 employees from its specialty papers unit including 30 at the plant.

The company’s other two units — composite fibers and advanced airlaid materials — posted fourth-quarter sales of $143.7 million and $65.7 million, respectively.

Composite fibers includes materials used in the production of some food goods, including tea bags and coffee filters. Advanced airlaid materials include those used in baby wipes, feminine hygiene products and adult diapers. 

Glatfelter’s specialty papers are used in book publishing, credit-card receipts, envelopes and other applications.

The operating margin for the specialty papers unit was 1.8 percent in the fourth quarter, down from 6.5 percent in the same period last year. That was lower than the two other divisions, which were at or above 11 percent.

Overall Glatfelter endured a net loss of $10.1 million in the fourth quarter of 2017, compared to a net loss of $16.2 million in the fourth quarter of 2016. The company overall saw net sales of $399.9 million in the fourth quarter of 2017, compared to $390.9 million in the same quarter of 2016. 

If the company sells the three production facilities involved in specialty papers, it will be left with a single facility in the United States, in Fort Smith, Ark. The company operates seven plants in Europe, including four in Germany, and one in the Philippines.

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Gillian Branstetter

Gillian Branstetter

Gillian Branstetter covers health care news for the Central Penn Business Journal. Email her at gbranstetter@cpbj.com.

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