Chapman Forest Products notified employees Monday of its plans to shutdown operations at the Butler County plant, according to employees and sources outside of the company.

No official statement had been released as of Tuesday afternoon, but Greenville Mayor Dexter McLendon confirmed the company would be closing within the next four weeks.

Chapman Forest Products was one of Butler County’s largest employers with a workforce of 325 before a round of deep job cuts announced last November. CEO and owner Phillip J. Smith announced the company’s plans to lay off 70 employees for a period of six to 12 months. The November cuts came in reaction to decreased demand in the struggling economy, Smith said at that time.

The closing affects 263 people.

“This is going to hurt us,” said McLendon. “It’s going to have a snowball effect on us and it’s going to hurt the people who sold timber to Chapman. It’s been tough. There’s just not a lot of people building homes or buying lumber right now.”

McLendon said he didn’t blame Smith because the lumber industry, as a whole, has been staggered by the downturn in the housing market. Smith purchased the company in 2008 from International Paper Inc.

He is a native of Greenville.

“I’ve known Phil Smith about all of my life,” said McLendon. “He’s a good Christian and an excellent person. I’m sure this is the last thing he wanted to have to do.”

McLendon said the closing comes at a bad time, especially because he felt the economy was finally beginning to turn around for Butler County.

“We’ve had some people come in and take some looks at property we had (for businesses),” said McLendon. “It looked like was about to turn the corner and then this happens. We feel so bad for the people down there at Chapman.”

Chapman Forest Products is a manufacturer of Southern Yellow Pine lumber and plywood products. The mill in Chapman was purchased in January 2008 from International Paper Corporation.