Expera Specialty Solutions announced Tuesday that it would shut down its pulp mill in Old Town by the end of the year.
The Wisconsin-based company, which purchased the mill less than a year ago and then restarted it, cited falling market prices for pulp, combined with wood costs, as factors in the decision. The mill in Penobscot County employs 151 hourly workers and 44 salaried workers.
“Expera successfully restarted the mill,” Russ Wanke, Expera’s president and CEO, said in a written statement. “However, since the restart, the decline of the Canadian dollar exchange rate combined with a significant increase of new pulp capacity has led to a material drop in market pulp prices. In addition, wood costs have not moderated in Maine commensurate with demand decline. The combination of these forces does not allow sustainable operations even with a dedicated and talented team of employees.”
Expera will investigate the possibility of selling the mill, which was founded more than a century ago, but “those details are just in the beginning stages and so we have no details about a sale process at this time,” Addie Teeters, a company spokeswoman, said Tuesday.
Expera operates four paper mills in Wisconsin that manufacture specialty paper products for use in pressure-sensitive release liners and industrial and food packaging. It bought the Old Town pulp mill in December 2014 with plans to ship the pulp to its Wisconsin mills, as well as sell it on the open market, Teeters said. The Old Town mill has the capacity to produce more than 200,000 tons of pulp annually.
Expera bought the mill, known then as Old Town Fuel & Fiber, from the New York-based private equity firm Patriarch Partners, which had previously closed the mill indefinitely in August 2014.
Under Patriarch, the mill also was researching the development of biofuels made from wood.
Expera said it is working with the Maine Department of Labor to assist the affected workers, partly through the state’s Rapid Response retraining program.
Teeters said the company plans to file on Wednesday a Worker Adjustment and Retraining Notice, as required by law whenever an employer is anticipating possible plant closings and mass layoffs within the next 60 days. She said all employees will effectively be paid through the end of the year.
Wanke praised the workers in Old Town, but “unfortunately these market conditions were out of their individual control,” the CEO said.
State Sen. Jim Dill, D-Old Town, said Tuesday’s news is “a huge economic blow for our region, and devastating news to the mill’s workers and their families.”
“While I remain hopeful that a suitable buyer will commit to keeping this productive facility open, we must in the meantime do everything we can to support the nearly 200 men and women who make their living in the mill and who stand to lose their jobs through no fault of their own,” Dill said in a written statement. “I am committed to doing whatever I can to ensure those workers land on their feet, regardless of what the future holds for Old Town Fuel & Fiber.”
Expera’s statement came on the heels of Monday’s announcement that Lincoln Paper and Tissue has filed for Chapter 11 bankruptcy protection. The specialty paper and tissue plant in Penobscot County expects to be auctioned off in the near future. It employs 170.
Two other Maine paper mills, in Millinocket and Bucksport, have closed in the past year.
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