Stonewall Packaging closes abruptly to put 43 out of work

Citing slow sales and another company’s broken commitment to buy product, Stonewall Packaging LLC closed its manufacturing plant in Sylva on May 15. The closing put 43 employees out of work.

In a news release, Stonewall said it “was forced to cease operations because it was unable to sell enough corrugated cardboard sheets to remain in business. A company that had committed to purchase a large volume of the Stonewall product unfortunately did not uphold its commitment.”

Jackson Paper Manufacturing Co., an investor in the project, which started just more than a year ago, said its operations were not affected.  Jackson Paper supplied raw material used in Stonewall’s production, and the news release noted that Jackson’s employees and management “are very disappointed in the Stonewall Packaging closure.”

“This is not the outcome that we had hoped for with our investment in Stonewall, and we did everything within our power to prevent it,” Timothy Campbell, president and CEO of Stonewall and Jackson Paper, said in the release. “Operations at Jackson Paper are strong and expected to remain so.”

Jackson Paper said last year it would buy and renovate the old Chasam Building, a 200,000-square-foot former sewing operation on Scott Creek Road, not far from Harris Regional Hospital. Stonewall had said previously that the new facility would eventually employ 61 people, with an average annual pay of $39,344 plus benefits.

The $17 million plant was planned to cater to smaller box makers looking for sources for packaging materials other than the industry’s largest players, Campbell said last year.

The N.C. Department of Commerce had agreed to provide a $200,000 grant through its One North Carolina Fund, but the company and the state said the money was never disbursed.

“They got their grant in April of  ’09, but these grants are never paid upfront,” said Deborah Barnes, spokeswoman for the N.C. Department of Commerce, which administers the One North Carolina Fund. “They are performance-based grants. In other words, they don’t get the money until they create the jobs, so the bottom line is they never got the money.”

Unemployment in Jackson County stood at 10.3 percent in March, with 2,010 people without work, out of a work force of 19,578, according to the N.C. Employment Security Commission.

In the release, Campbell acknowledged the shutdown “is a terrible situation for the dedicated and hardworking employees of Stonewall Packaging. Our thoughts and prayers are with them during this difficult time, and we will do everything possible to support those affected.”