Citing decreased demand for uncoated freesheet paper in the U.S., International Paper (IP -0.33%) has decided to permanently close its Courtland, Ala., mill, the company announced today.

The mill will close in stages, according to the company, and is expected to be completely shut down by the end of Q1, 2014. The mill produces paper for envelopes, forms, labels, printers, copiers, and magazines. The company says demand for such paper has been in decline in North America since 1999 and the trend has recently accelerated as consumers switch to options such as online publications and electronic billing and filing.

International Paper said in its statement that 1,100 employees will be affected by the mill's closure, and it intends to "work closely with union officials concerning benefits and other assistance programs for affected hourly employees." Salaried employees affected by the closure will be eligible to receive severance packages and job placement assistance, International Paper said.

International Paper Co. has about 70,000 employees in total, so 1,100 would be about 1.6% of the total.

Once the mill closes, the business will have four paper mills remaining, in Eastover, S.C.; Riverdale, Ala.; Georgetown, S.C.; and Ticonderoga, N.Y. International Paper said that its fluff pulp business is not affected by the mill closing.

According to International Paper's statement, shutting down the Courtland mill will reduce its freesheet paper production capacity by 950,000 tons, 765,000 tons of which are uncoated freesheet. The company expects a pre-tax asset write-off and associated depreciation charges of approximately $550 million related to the closure, along with pre-tax severance and related costs of an estimated $125 million.

The write-offs and charges will be taken the balance of this year, and into 2014.

-- Material from The Associated Press was used in this report