The Jay mill will close in early 2023

Jay’s paper mill can be seen on the banks of the Androscoggin River in 2020. The owners have announced that they will close the mill in the first quarter of 2023. Photo sent

JAY – The Androscoggin Paper Mill, which employs about 230 people and is the city’s largest private employer, will close in the first quarter of 2023, according to owner, Pixelle Specialty Solutions of Pennsylvania.

Company CEO Tim Hess on Tuesday cited the economic forces that made the operations unsustainable.

People who heard the news in the area repeated the same or similar comment: “It’s a sad day in the city.”

City Director Shiloh LaFreniere released a statement Tuesday afternoon after being informed of the closure:

“We are devastated by today’s news,” he wrote. “Our immediate concern is the well-being of workers and their families as well as community members who will be affected by the closure, especially in this difficult economy. There are many questions we will ask ourselves and the mill in the coming days to understand the best path for our community to follow, but for today our thoughts are with the employees and the mill ”.

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

“Pixelle CEO Tim Hess called me today to share the sad news of the plant closure,” Mills said. “Since the digester explosion, my administration has frequently communicated 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 closing of the mill and he said that, unfortunately, he is not in. He said that if there was, he would ask for it and I told him that I would do everything in my power to help him.

“I am deeply disappointed, but, above all, I am deeply concerned about the livelihoods and well-being of those who work at the mill. I was happy to hear that Pixelle will offer all employees health benefits and severance pay after their employment ends in 2023, but I am also ordering Labor Commissioner Laura Fortman to send a rapid response team to help support the mills and provide whatever resources are available for them and their families ”.

The roof of Androscoggin Mill in Jay burns in ash after an explosion in 2020. Officials announced Tuesday that Jay’s largest private employer, the paper mill on the banks of the Androscoggin River, would be closed early in the year. next year. File photo by Andree Kehn / Sun Journal

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

“The dedicated and skilled paper manufacturing employees at our Jay, Maine paper mill have worked tirelessly to achieve financial sustainability in difficult economic times,” Hess tweeted Tuesday. “They have produced the highest quality products and maintained a safe working environment. Economic forces beyond our control have come together to make profitable operations at the mill unsustainable. We are grateful for the efforts of the employees and are committed to assisting them with ongoing job offers in other Pixelle locations or relocation support ”.

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

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

At the time the paper mill changed ownership, its specialty papers portfolio included bleached and natural kraft products for food packaging, self-adhesive release labels and tags, packaging tapes, insulation backings for building materials, and moisture and moisture resistant products. to fats.

Shortly after that purchase, in April 2020, a massive explosion occurred at the mill when a digester broke. One of the two pulp digesters, known as digester A, broke and fell on the second digester, digester B, destroying both in the process. The loss led the mill to the closure of a paper machine and, ultimately, to the decision not to rebuild the mill.

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

The company planned to use pulp from other factories, including its Maine-based facilities, to power its paper-making operations.

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

Pixelle established a $ 1 million fund to support retraining of those laid off due to pulp digester breakdown and developed an ongoing program to further support retraining of former employees.

In May 2021, Pixelle and related companies said the digester broke due to failed welds and filed a civil suit against Florida-based Trico Mechanical Contractors.

The breakup “substantially damaged the plant and significantly disrupted Pixelle’s commercial activities. Pixelle is filing this lawsuit to recover losses and damages suffered as a result of unlawful acts and omissions of the accused Trico and in accordance with the applicable contractual agreements ”, according to the court documents.

In April of this year, Pixelle Specialty Solutions Holding announced that it has entered into an agreement to sell the Androscoggin paper mill to HIG Capital, a leading global alternative investment company based in Pennsylvania. Terms of the transaction were not disclosed, but the sale was expected to be finalized in the second quarter of this year. It is not clear if this happened.

LOCAL REACTION

“It’s a horrible, horrible thing,” Franklin County Commission Chairman Terry Brann said. “I think it will impact the entire county and all the counties around us. In the future it will impact everyone for a long time. It’s a terrible thing ”.

Jay, once the highest taxpayer in Franklin County, has dropped to third this year and will jump to fourth next year due to the mill’s downsizing over the years.

Jay’s recruiters and administrators will discuss submitting a fifth application to the Maine Sudden and Severe Disruption of Valuation program, LaFreniere said.

The state lowered the city’s valuation by $ 201.1 million each for 2019, 2020, 2021, and 2022, after the city filed for relief. The adjusted valuation for 2019 is $ 347.85 million, 2020 is $ 347 million, 2021 is $ 388.1 million, and 2022 is $ 415.1 million, according to a letter from the February 2 by Deputy Director Steven J. Salley, supervisor of the Municipal Services Property Tax Division.

In February, the state lowered the city’s rating for the fourth time since 2013.

Locally, the value of the Androscoggin Mill and associated property increased by $ 30,342 to reach $ 109.84 million for the 2022-23 valuation, according to information provided by John’s city valuation agent, Paul Binette. E. O’Donnell Associates of New Gloucester in August. Mill owners were to be charged a $ 1.8 million tax after taking into account the tax increase financing agreement.

“I can’t say I’m very surprised,” said Jay’s Glenda DiPompo. She owns the Riverside Kwik Stop in Jay at the corner of Riley Road where the mill is located.

Once upon a time there were over 1,200 employees at the mill. He recalled when it was difficult to find a parking space at the mill, but the number of vehicles parked there has decreased significantly.

Though the mill has shrunk over the years, the convenience store and gas station have held up, he said.

Recruiter Lee Ann Dalessandro, whose husband worked in the paper mill for nearly 40 years and retired 10 years ago, said he still knows many people who work there.

When he heard the news, his first thought was to worry about employees losing their positions and second, he said, the effect the plant closure will have on Jay’s taxpayers.

Everyone said it’s a “sad day” in town, he said.

According to recent statistics, in 2000 there were 52 private Maine companies involved in the production of the paper.

That number dropped to 37 by 2010 and dropped to 19 by March 2020.

In 2010, the paper industry employed 7,397 Mainers and paid a total salary of over $ 470 million.

By 2018, the number of employees dropped to 4,386 and wages dropped to $ 336 million.

According to the Federal Department of Labor, the median median wage for a chemical engineer in the paper industry in May 2021 was $ 95,600.

Portland Press Herald reporter Carol Coultas contributed to this report


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