On Sept. 29, Wisconsin-based Expera Specialty Solutions, LLC (Expera) announced in a press release the timetable for the closing of the Old Town pulp mill. The closing, which is happening in December of this year, will affect 195 workers.
Expera purchased the Old Town mill in 2014 for $10 million on Dec. 5, after it went into bankruptcy. The closing, according to CEO Russ Wanke, is a compound of the decline in the Canadian dollar and a drop in market pulp prices.
“Expera successfully restarted the mill,” Wanke said in a press release. “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,” Wanke continued. “The combination of these forces does not allow sustainable operations even with a dedicated and talented team of employees.”
This is just another step in the crisis of the Maine paper and pulp industry has endured recently. This news came just one day after Lincoln Paper and Tissue LLC announced they had filed for bankruptcy with an estimated between $10 million and $50 million in debt and assets. Verso Corporation, a Tennessee based company, closed their Bucksport mill in January, leaving 540 workers affected. Verso also announced plans to lay off 300 workers from their Jay mill by early 2016.
Governor Paul LePage told WGME 13 News that Maine lawmakers and high energy costs, neither of which are cited by the companies, are the reasons the state cannot keep manufacturing groups here. The governor has proposed many plans to find cheaper energy rates and expand natural gas, but not everyone has gotten on board.
“You can’t fix stupid,” LePage said of lawmakers. “Unless we find a way to lower our energy costs, these companies that we have manufacturing will leave.”
It was reported by the Bangor Daily News that the announcement on Sept. 29 was the first Old Town officials have heard of the shutdown, according to Town Manager Bill Mayo.
Expera said is they are working with the Maine Department of Labor to assist the workers affected by the closing.
“We are working with the employees to assist them with the impacts of this decision,” Wanke said. “Unfortunately, these market conditions were out of their individual control.”