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 economic forces that have made operations unsustainable.
People hearing the news in the area repeated the same or similar comment: “It’s a sad day in town.”
City Manager Shiloh LaFreniere released a statement Tuesday afternoon after being informed of the closure:
“We are devastated by the news today,” she wrote. “Our immediate concern is the well-being of workers and their families as well as members of the community who will be affected by the closure, especially in this difficult economy. There are many questions we will ask ourselves and the factory in the coming days to determine the best way forward for our community, but for today our thoughts are with the employees and the factory. .
Governor Janet Mills also released a statement, saying the state had offered support to try to keep the plant open, but company executives said there was nothing they could do.
“Pixelle CEO Tim Hess called me earlier today to share the sad news of the plant closure,” Mills said. “Since the digester explosion, my administration has communicated frequently with the plant managers to offer them our support. And during our conversation today, I asked Mr. Hess if there was anything the state could do to prevent the plant from closing and he replied that, unfortunately, this was not the case. He said that if there had been, he would have asked, and I told him that I would have done everything in my power to help.
“I am deeply disappointed, but more importantly, I am deeply concerned for the livelihoods and well-being of those working at the factory. I was pleased to hear that Pixelle will provide all employees with health care benefits and severance pay after their employment ends in 2023, but I’m also asking Labor Commissioner Laura Fortman to send a rapid response team to help support factory workers and provide all available services. resources for them and their families.
The plant produces specialty label and release papers, as well as industrial and packaging materials. It was built by International Paper in 1965, but the city has been making paper in several mills since 1888.
“The dedicated and skilled papermaking employees at our Jay, Maine mill have worked tirelessly to achieve financial sustainability during these tough economic times,” Hess tweeted Tuesday. “They have produced the highest quality products and maintained a safe working environment. Economic forces beyond our control have combined to make the plant’s profitable operations unsustainable. We appreciate the efforts of employees and are committed to assisting them with continued employment opportunities at other Pixelle locations or outplacement support.
Pixelle purchased the Androscoggin plant and associated properties from Verso Corp. in early 2020 in a $400 million deal, adding the Jay property to its specialty paper operations in Ohio, Pennsylvania and Wisconsin.
Together the mills operated 11 paper machines, including two at Jay, and produced over one million tons of paper annually.
At the time the mill changed ownership, its specialty paper portfolio included bleached and natural kraft products for food packaging, pressure-sensitive release liners and labels, packaging tapes, insulating carriers for construction materials and products resistant to moisture and grease.
Shortly after this purchase, in April 2020, there was a massive explosion at the plant when a digester ruptured. One of the two wood pulp digesters, known as digester A, broke off and fell onto the second digester, digester B, destroying them both in the process. The loss led to the mill closing a paper machine and ultimately deciding not to rebuild its pulp mill.
At the time, Alan Ulman, spokesman for Pixelle Specialty Solutions, said the decision was part of its long-term strategy to continue making specialty papers on its two other machines and using more than 250 full-time employees. full.
The company planned to use pulp from other mills, including facilities in Maine, to fuel its papermaking operations.
About 177 jobs were cut at the plant in the months immediately following the explosion, which halted manufacturing for eight days and kicked off months of recovery and strategic planning.
Pixelle established a $1 million fund to support the retraining of those made redundant as a result of the pulp digester breakdown, and developed an ongoing program to further support the retraining of former employees.
In May 2021, Pixelle and related companies claimed the digester failed due to failed welds and filed a civil suit against Florida-based Trico Mechanical Contractors.
The rupture “significantly damaged the plant and significantly interrupted Pixelle’s business activities. Pixelle is bringing this action to recover losses and damages suffered as a result of defendant Trico’s wrongful acts and omissions and pursuant to applicable contractual agreements,” according to court documents.
In April this year, Pixelle Specialty Solutions Holding announced that it had reached an agreement to sell the Androscoggin paper mill to HIG Capital, a leading global alternative investment firm based in Pennsylvania. Terms of the transaction were not disclosed, but the sale was expected to be completed in the second quarter of this year. We don’t know if it happened.
“It’s a horrible, horrible thing,” Franklin County Commission Chairman Terry Brann said. “I think this is going to impact the whole county and all the counties around us. This is going to impact everyone in the future for a long time. It’s a terrible thing.
Jay, once Franklin County’s highest ratepayer, fell to third this year and will drop to fourth next year due to downsizing at the plant over the years.
Selectees and Jay’s administrators will discuss filing a fifth application under Maine’s Sudden and Severe Assessment Disruption Program, LaFreniere said.
The state lowered the city’s assessment by $201.1 million each year for 2019, 2020, 2021 and 2022 after the city sought redress. 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 dated Feb. 2. from Deputy Director Steven J. Salley, Supervisor of the Municipal Services Property Tax Division.
In February, the state lowered the city’s valuation for the fourth time since 2013.
Locally, the value of the Androscoggin plant and associated property has increased by $30,342 to $109.84 million for the 2022-23 valuation, according to information provided by the city’s valuation officer. , Paul Binette, of John E. O’Donnell Associates of New Gloucester in August. . Factory owners had to pay a tax of $1.8 million after the tax increment financing agreement was taken into account.
“I can’t say I’m very surprised,” said Glenda DiPompo of Jay. She owns the Riverside Kwik Stop in Jay, on the corner of Riley Road, where the factory is located.
There were once over 1,200 employees at the plant. She remembers that it was difficult to find a parking space at the factory, but the number of vehicles parked there decreased considerably.
Even though the factory has downsized over the years, the convenience store and gas station have held up, she said.
Coach Lee Ann Dalessandro, whose husband worked at the factory for nearly 40 years and retired 10 years ago, said they still knew many people who worked there.
When she heard the news, her first thought was to worry about the employees losing their jobs and, secondly, she said, the effect the plant closure will have on Jay’s taxpayers.
Everyone said it was a “sad day” in town, she said.
In 2000, there were 52 private companies in Maine involved in papermaking, according to some recent statistics.
This number fell to 37 in 2010 and fell to 19 in March 2020.
In 2010, the paper industry employed 7,397 Mainers and paid total salaries of over $470 million.
In 2018, the number of jobs fell to 4,386 and wages fell to $336 million.
According to the Federal Department of Labor, the average salary 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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