Paper Producer Makes Layoffs Permanent in Maine

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Verso Corp Permanently Shutting Down Paper Machine

Manufacturer of coated paper has announced that it is permanently closing down its paper machine in Jay, Maine. The paper machine was idled earlier this year. Following the shutdown, all of the temporary layoffs will be made permanent.

Last fall, Verso Corp (OTCMKTS:VRSZQ) announced that it would be idling its No. 3 paper machine at its paper mill in Jay. Beginning this year, the company temporarily laid off 120 employees, saying they would be brought back to work if the paper machine would restart.

Verso had warned, however, that if the company did not find enough customers for the products being produced on the No. 3 machine, the temporary layoffs would be made permanent.

Verso has faced a significant decline in demand for its products that were being manufactured on the No. 3 machine. The company was primarily manufacturing glossy coated paper for magazines and other glossy publications on the machine.

However, the shift of consumers towards digital media has led to an industry-wide decline in print media. Consequently, demand for paper publications has dropped.

However, this is not the first time the Jay mill will face layoffs. Two years ago, the mill witnessed mass layoffs when Verso shut down two other machines—the No. 1 pulp dryer and the No. 2 paper machine. Nearly 300 employees lost their jobs following the shutdown, taking the headcount from 865 employees to 565 employees at the mill.

The company has seen an overall decline in its paper business due to an industry-wide slump in demand for coated paper. This forced the company to file for bankruptcy last year, which it survived through aggressive restructuring.

Verso’s manufacturing facility in Jay, which is popularly named Androscoggin Mill after the river, has now shifted its focus to products that are showing promising demand. The mill is currently manufacturing specialty paper for food packaging, particularly grease-resistant paper for wrapping greasy foods.

Verso’s CEO, Christopher DiSantis, said in a press release that the market for specialty papers is growing. He said, “Although the footprint of the Androscoggin Mill is getting smaller, we continue to take steps to position the facility as a leading producer for the growing specialty papers market.”

Following the closure of the No. 3 paper machine, the annual production capacity of the Jay mill will drop by 200,000 tons of paper. The Jay mill is reported to have about 400 employees.

 

Sources

Verso paper mill in Jay makes 120 layoffs permanent,” BDN Maine, July 19, 2017.

Categories: Job Cuts, News

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