Koch Industries Plant Shutdown Sends Florida Town Hit by Hurricane Reeling

On August 30, 2023, the Category 3 hurricane known as Idalia made landfall 20 miles south of Perry, Florida, damaging buildings, flooding homes, and shuttering businesses.

Less than three weeks later, the town was hit by another disaster when its largest employer, Georgia-Pacific, announced on September 18 that it would shutter its cellulose factory, known as the Foley mill. The company claimed that the closing had been planned before the hurricane—for “strategic” reasons—and did not reflect “the hard work and effort of the Foley team.”

With only 7,000 residents, Perry lost far more than the 500 jobs the mill provided when it shut down in November. In fact, as many as 1,500 other jobs in the town have been impacted by the closure. The town has also lost $9.9 million a year in tax revenue paid by the company, a sizable portion of its tax base.

Georgia-Pacific (GP) is owned by the Koch Industries conglomerate and is the second largest private company in the U.S. after Cargill, the grain merchant. The net worth of Charles Koch is an estimated $54 billion, according to Forbes, with that of Julia Koch, the widow of his brother and partner David, estimated at $59 billion. Together, they control 82% of Koch Industries stock.

Perry, known as the “Tree City of the South,” sits in the middle of millions of acres of pine forest offering trees used in the production of cellulose, a tree pulp processed to produce paper and fibers. Other cellulose derivatives are used in the manufacture of plastics, photographic films, and certain textiles, along with adhesives, explosives, thickening agents for foods, and moisture-proof coatings.

Since Koch had invested $84 million in 2018 to make the Foley mill more energy efficient and enable it to use less water, the closing came as a surprise. GP said at the time that its investment showed the company’s commitment to the mill since the improvements provided both competitive and environmental advantages. Five years later—and a decade after it acquired the facility in 2013—GP conceded that it “does not believe that the mill can competitively serve its customers in the long term.”

Public officials were quick to criticize GP. “This closure impacts thousands of my constituents following a devastating hurricane, a time when communities need reliability and stability the most,” U.S. Rep. Neal Dunn (R-FL) noted in a prepared statement. “What’s even more concerning is that Georgia-Pacific neglected to give local leaders ample notice so we can support Taylor County through this difficult time. They ought to be ashamed.”

Florida Gov. Ron DeSantis, a GOP presidential candidate, did not admonish Koch for the closing, but in a three-paragraph statement on X (formerly Twitter) he called on GP to provide Foley mill workers with severance pay and insurance, which the company was already doing. 

The closing and the governor’s response to it came before the Koch network—specifically, Americans for Prosperity Action, Charles Koch’s super PAC—announced its endorsement of former South Carolina Gov. Nikki Haley in the GOP presidential primaries. It is not known if Koch ever considered endorsing DeSantis, but in 2021 Julia Koch donated $25,000 to DeSantis’ 2022 gubernatorial reelection campaign.

In October, U.S. Senator Rick Scott (R-FL) called on the U.S. Environmental Protection Agency to preserve the mill’s environmental permits and allow them to be transferable if a buyer could be found for the facility.

In November, the former Foley mill manager pitched opportunities for reopening the facility at a paper and pulp trade show in London and encouraged interested parties to call GP. 

In a prepared statement in December, GP said that it had “accepted calls from companies who have expressed interest in discussing the purchase of the Foley facility” but that it was not yet prepared to discuss any details publicly.

Last September, GP also completed an 18-month-long closure of its paper mill in Green Bay, Wisconsin, which had produced bathroom tissue, napkins, and other paper products for 122 years under numerous owners. Almost 200 workers were still employed at the plant prior to its shutdown.

By threatening to close a plant, GP has occasionally won tax breaks from towns heavily reliant on the company for jobs. In November 2019, the Center for Media and Democracy (CMD) reported that the Toledo, Oregon City Council voted to grant GP a 15-year property tax exemption for promising to make new investments in the plant.

“This is extortion,” Toledo City Councilor Bill Dalbey said at the time. “The only reason any of us want to vote for this is because we think it will have a good effect in ensuring those jobs stay in our town, but they are going to do what they’re going to do regardless.” 

In 2017, CMD reported on a $5.2-million tax abatement for a GP plant in one of Alabama’s poorest cities, Talladega.

Taylor County, the former home of the Foley mill, is one of Florida’s poorest counties. Economic incentives large enough to help attract a buyer would need to come from the state, but so far no such incentives have been forthcoming—or presumably even discussed—by the DeSantis administration.