Jay paper mill to close in early 2023

JAY — The Androscoggin paper mill, which employs about 230 individuals and is the city’s greatest non-public employer, will shut within the first quarter of 2023, in accordance with the proprietor, Pixelle Specialty Options of Pennsylvania.

Firm CEO Tim Hess on Tuesday cited financial forces that made operations unsustainable.

Individuals listening to the information within the space repeated the identical or related remark: “It’s a unhappy day on the town.”

City Supervisor Shiloh LaFreniere issued a press release Tuesday afternoon after being knowledgeable of the closure:

“We’re devastated by the information at the moment,” she wrote. “Our fast concern is the welfare of the employees and their households in addition to the group members that will probably be affected by the closing, particularly on this tough financial system. There are loads of questions that we’ll be asking ourselves and the mill within the coming days to determine the very best path ahead for our group however for at the moment, our ideas are with the workers and the mill.”

Gov. Janet Mills additionally issued a press release, saying the state supplied its assist to attempt to hold the mill open, however firm leaders stated there was nothing they might do.

“The CEO of Pixelle, Tim Hess, referred to as me earlier at the moment to share the unhappy information of the mill’s closure,” Mills stated. “For the reason that digester explosion, my Administration has been speaking steadily with mill officers to supply our assist. And through our dialog at the moment, I requested Mr. Hess if there’s something the state can do to forestall the closure of the mill and he stated that, sadly, there’s not. He stated that if there had been, he would have requested, and I informed him that I might have completed every little thing inside my energy to assist.

“I’m deeply dissatisfied, however, extra importantly, I’m deeply involved for the livelihoods and well-being of those that work on the mill. I used to be glad to listen to that Pixelle will provide all staff well being care advantages and severance pay following the top of their employment in 2023, however I’m additionally directing Labor Commissioner Laura Fortman to ship a Speedy Response Group to assist assist the millworkers and supply all out there sources to them and their households.”

The roof of the Androscoggin Mill in Jay smolders after an explosion in 2020. Officers introduced Tuesday that Jay’s greatest non-public employer, the paper mill on the banks of the Androscoggin River, can be closed early subsequent 12 months. Andree Kehn/Solar Journal file picture

The mill produces specialty label and launch papers, in addition to industrial and packaging supplies. It was constructed by Worldwide Paper in 1965, however the city has been making paper in a number of mills since 1888.

“The devoted and expert paper making staff in our mill in Jay, Maine, have labored tirelessly to realize monetary sustainability in difficult financial instances” Hess tweeted Tuesday. “They’ve produced merchandise of the best high quality and maintained a secure work surroundings. Financial forces past our management have mixed to make worthwhile operations on the mill unsustainable. We’re grateful for the efforts of the workers and are dedicated to helping them with presents of continued employment at different Pixelle areas or outplacement assist.”

Pixelle purchased the Androscoggin Mill and related properties from Verso Corp. in early 2020 as a part of a $400 million deal, including the Jay property to its specialty paper operations in Ohio, Pennsylvania and Wisconsin.

Collectively, the mills operated 11 paper machines, together with two in Jay, and produced greater than 1 million tons of paper yearly.

On the time the mill modified possession, its specialty papers portfolio included bleached and pure kraft merchandise for meals packaging, pressure-sensitive launch liners and labels, packaging tapes, insulation backing for constructing supplies and wet-strength and grease-resistant merchandise.

Shortly after that buy, in April 2020, there was a large explosion on the mill when a digester ruptured. Certainly one of two wooden pulp digesters, referred to as digester A, ruptured and fell on the second digester, digester B, destroying each within the course of. The loss resulted within the mill shutting down one paper machine and, finally, a call to not rebuild its pulp mill.

On the time, Alan Ulman, spokesman for Pixelle Specialty Options, stated the choice was a part of its long-term technique to proceed manufacturing specialty papers on its different two machines and using greater than 250 full-time staff.

The corporate deliberate to make use of pulp sourced from different mills, together with Maine-based amenities, to feed its paper-making operations.

About 177 jobs have been eradicated on the mill within the months instantly following the explosion, which halted manufacturing for eight days and initiated months of restoration and strategic planning.

Pixelle established a $1 million fund to assist job retraining for these laid off because of the pulp digester rupture, and it developed an ongoing program to additional assist former worker job retraining.

In Could 2021, Pixelle and associated firms claimed the digester ruptured because of failed welds, and filed a civil lawsuit in opposition to Trico Mechanical Contractors, which relies in Florida.

The rupture “considerably broken the mill and considerably interrupted Pixelle’s enterprise actions. Pixelle brings this lawsuit to get well losses and damages sustained attributable to defendant Trico’s wrongful acts and omissions and pursuant to relevant contractual agreements,” in accordance with court docket paperwork.

In April of this 12 months, Pixelle Specialty Options Holding introduced it had entered into an settlement to promote the Androscoggin paper mill to H.I.G. Capital, a number one world different funding agency based mostly in Pennsylvania. Phrases of the transaction weren’t disclosed, however the sale was speculated to have been finalized within the second quarter of this 12 months. It’s unclear if it occurred.

LOCAL REACTION

“It’s a horrible, horrible factor,” Franklin County Fee Chairman Terry Brann stated. “I believe it’s going to affect the entire county and the entire counties round us. It’ll affect everyone sooner or later for a very long time. It’s a horrible factor.”

Jay, as soon as the best taxpayer in Franklin County, dropped to 3rd this 12 months and can go to fourth subsequent 12 months due to downsizing on the mill over time.

Jay selectpersons and directors will probably be discussing submitting a fifth utility to Maine Sudden and Extreme Disruption of Valuation program, LaFreniere stated.

The state lowered the city’s valuation by $201.1 million every for 2019, 2020, 2021 and 2022, after the city filed for reduction. The adjusted valuation for 2019 is $347.85 million, 2020 is $347 million, 2021 is $388.1 million and 2022 is $415.1 million, in accordance with a letter dated Feb. 2 from Deputy Director Steven J. Salley, supervisor of Municipal Companies Property Tax Division.

In February the state lowered the city’s valuation a fourth time since 2013.

Domestically, the Androscoggin Mill’s worth and related property elevated by $30,342 to make it $109.84 million for the 2022-23 valuation, in accordance with info supplied by the city’s assessing agent, Paul Binette, of John E. O’Donnell Associates of New Gloucester in August. Mill house owners have been to be assessed a tax of $1.8 million after the tax-increment financing settlement is factored in.

“I can’t say I’m a lot shocked,” Glenda DiPompo of Jay stated. She is an proprietor of the Riverside Kwik Cease in Jay on the nook of Riley Highway, the place the mill is situated.

There was as soon as over 1,200 staff on the mill. She remembered when it was tough to discover a parking spot on the mill however the numbers of automobiles parked there has decreased considerably.

As a lot because the mill has downsized over time, the comfort retailer and gasoline station has held its personal, she stated.

Selectperson Lee Ann Dalessandro, whose husband labored on the mill for practically 40 years and retired 10 years in the past, stated they nonetheless know lots of people who work there.

When she heard the information, her first thought was worrying concerning the staff dropping their positions and secondly, she stated, the have an effect on the mill’s closing may have on the taxpayers in Jay.

Everyone has been saying it’s a “unhappy day,” on the town, she stated.

In 2000, there have been 52 non-public Maine companies concerned in papermaking, in accordance with some current statistics.

That quantity dropped to 37 by 2010 and fell to 19 as of March 2020.

In 2010, the paper trade employed 7,397 Mainers and paid whole wages of greater than $470 million.

By 2018, the employment quantity dropped to 4,386 and wages dropped to $336 million.

In accordance with the federal Division of Labor, the common imply wage for a chemical engineer within the paper trade in Could 2021 was $95,600.

Portland Press Herald reporter Carol Coultas contributed to this report

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