Jay paper mill to close in early 2023

Gov. Janet Mills issued a statement saying the state offered its support to try to keep the mill open, but company leaders said there was nothing they could do.

The paper mill in Jay can be seen on the banks of the Androscoggin River in 2020. Owners announced they will close the mill in the first quarter of 2023. Submitted photo

JAY — The Androscoggin paper mill, which employs about 230 people and is the town’s biggest private employer, will close in the first quarter of 2023, according to the company.

Town Manager Shiloh LaFreniere issued this statement Tuesday afternoon after being informed of the closure:

“We are devastated by the news today. Our immediate concern is the welfare of the workers and their families as well as the community members that will be affected by the closing, especially in this difficult economy. There are a lot of questions that we will be asking ourselves and the mill in the coming days to figure out the best path forward for our community but for today, our thoughts are with the employees and the mill.”

Gov. Janet Mills also issued a statement, saying the state offered its support to try to keep the mill open, but company leaders said there was nothing they could do.

“The CEO of Pixelle, Tim Hess, called me earlier today to share the sad news of the mill’s closure. Since the digester explosion, my Administration has been communicating frequently with mill officials to offer our support. And during our conversation today, I asked Mr. Hess if there is anything the state can do to prevent the closure of the mill and he said that, unfortunately, there is not. He said that if there had been, he would have asked, and I told him that I would have done everything within my power to help.

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“I am deeply disappointed, but, more importantly, I am deeply concerned for the livelihoods and well-being of those who work at the mill. I was glad to hear that Pixelle will offer all employees health care benefits and severance pay following the end of their employment in 2023, but I am also directing Labor Commissioner Laura Fortman to send a Rapid Response Team to help support the mill workers and provide all available resources to them and their families.”

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Officials announced Tuesday Jay’s biggest private employer, the paper mill on the banks of the Androscoggin River, would be closed early next year. Andree Kehn/Sun Journal file photo

The mill produces specialty label and release papers, as well as industrial and packaging materials. It was built by International Paper in 1965, but the town has been making paper in several mills since 1888.

Pixelle CEO Hess tweeted Tuesday:

“The dedicated and skilled paper making employees in our mill in Jay, Maine, have worked tirelessly to achieve financial sustainability in challenging economic times. They have produced products of the highest quality and maintained a safe work environment. Economic forces beyond our control have combined to make profitable operations at the mill unsustainable. We are grateful for the efforts of the employees and are committed to assisting them with offers of continued employment at other Pixelle locations or outplacement support.”

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

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Together, the mills operated 11 paper machines, including two in Jay, and produced more than 1 million tons of paper annually.

At the time the mill changed ownership, its specialty papers portfolio included bleached and natural kraft products for food packaging, pressure-sensitive release liners and labels, packaging tapes, insulation backing for building materials and wet-strength and grease-resistant products.

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Shortly after that purchase, in April 2020, there was a massive explosion at the mill when a digester ruptured. One of two wood pulp digesters, known as digester A, ruptured and fell on the second digester, digester B, destroying both in the process. The loss resulted in the mill shutting down one paper machine and, ultimately, a decision not to rebuilt its pulp mill.

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Wreckage smolders after an explosion at the Jay paper mill Wednesday. The explosion shook the ground and produced a plume of black smoke that was visible for miles around. Sun Journal file photo

At the time, Alan Ulman, spokesman for Pixelle Specialty Solutions, said the decision was part of its long-term strategy to continue manufacturing specialty papers on its other two machines and utilizing more than 250 full-time employees.

The company planned to use pulp sourced from other mills, including Maine-based facilities, to feed its paper-making operations.

About 177 jobs were eliminated at the mill in the months immediately following the explosion, which halted manufacturing for eight days and initiated months of recovery and strategic planning.

Pixelle established a $1 million fund to support job retraining for those laid off as a result of the pulp digester rupture, and it developed an ongoing program to further support former employee job retraining.

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In May 2021, Pixelle and related companies claim that the digester ruptured as a result of failed welds, and filed a civil lawsuit against Trico Mechanical Contractors, Inc., which is based in Florida.

The rupture “substantially damaged the mill and significantly interrupted Pixelle’s business activities. Pixelle brings this lawsuit to recover losses and damages sustained due to defendant Trico’s wrongful acts and omissions and pursuant to applicable contractual agreements,” according to court documents.

In April of this year, Pixelle Specialty Solutions Holding announced it had entered into an agreement to sell the Androscoggin paper mill to H.I.G. Capital, a leading global alternative investment firm based in Pennsylvania. Terms of the transaction were not disclosed, but the sale was supposed to have been finalized in the second quarter of this year.

Original Post: https://www.sunjournal.com/2022/09/20/jay-paper-mill-to-close-after-the-first-of-the-year/

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