Neenah Paper to Close Plant

The plant is located near Great Barrington, Mass. Last month the Atlanta-area company said it would buy Fox River, which has a total of 750 employees and four manufacturing plants, including 140 at the plant that is closing.

Neenah Paper will take a one-time cash charge of about $3 million for severance and other costs related to the closure.

The company said it expects ongoing annual savings of about $5 million from the deal, but that will not be realized immediately due to product transition costs in 2007.

"Closing the mill allows us to eliminate costs and improve margins while still serving the needs of key customers," said Sean Erwin, company chairman and chief executive. "Selected products made at Housatonic will be produced at our other sites, where we have available capacity and the ability to make these grades at a lower cost."

Shares fell 82 cents, or 2.2 percent, to $37.18 during afternoon trading on the New York Stock Exchange. The stock has traded between $28.10 and $38.34 during the past year.