Jay Paper Mill will close in early 2023

The Gay 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. picture sent

JAY — Androscoggin’s 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 in Pennsylvania.

Company CEO Tim Hess on Tuesday pointed to the economic forces that have made operations unsustainable.

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

City Manager Shiloh Lavrinier issued a statement Tuesday noon after being informed of the closure:

“We were 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 shutdown, especially in this challenging economy. There are a lot of questions we will be asking ourselves and the factory in the coming days to figure out the best way forward for our community, but today, our thoughts are with the employees and the factory.”

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

“Pixle CEO Tim Hess called me earlier today to share the sad news of the plant shutdown,” Mills said. “Since the digester exploded, my department has been communicating frequently with mill officials to offer our support. During our conversation today, I asked Mr. Hess if there was anything the state could do to prevent the mill from closing, and he said that unfortunately there is none. He said that if there had been, he would have been. He asked, and I told him I was going to do everything I could to help.

“I am deeply disappointed, but most importantly I am deeply concerned for the livelihoods and well-being of those who work in the factory. I was pleased to hear that Pixelle will provide all employees with post-employment health care and end-of-service benefits in 2023, but I am also directing Labor Commissioner Laura Furtman to send a rapid response team to help support mill workers and provide all available resources for them and their families.” .

The roof of the Androscoggin Mill in Gay smoke after an explosion in 2020. Officials announced Tuesday that Gay’s largest private employer, the Androscoggin Riverside paper mill, will close early next year. Andree Kehn/Sun Journal’s profile photo

The factory 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 making paper in several factories since 1888.

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

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

Together, the factories operated 11 paper machines, including two at Gay’s, and produced more than one million tons of paper annually.

At the time the plant’s ownership changed, its specialty portfolio included bleached and natural kraft products for food packaging, pressure-sensitive release liners and labels, packaging tapes, insulating backing for building materials, and moisture and grease resistant products.

Shortly after this purchase, in April 2020, a massive explosion occurred at the plant when the digestive system ruptured. One of the two wood-pulp digesters, known as digestion A, ruptured, and fell onto the second digest, digest B, destroying both in the process. The loss led to the plant shutdown of one pulp machine and, eventually, a decision not to rebuild the pulp mill.

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

The company planned to use pulp sourced from other factories, including Maine facilities, to fuel papermaking operations.

About 177 jobs were cut at the plant in the months immediately following the explosion, bringing manufacturing to a standstill for eight days and beginning months of recovery and strategic planning.

Pixelle has created a $1 million fund to support job retraining for those laid off as a result of a ruptured pulp, and has developed an ongoing program to support retraining of former employees.

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

The crack “caused significant damage to the plant and significantly impeded Pixelle’s business activities. Pixelle is filing this lawsuit to recover losses and damages incurred by Defendant Trico’s erroneous acts and omissions and in accordance with applicable contractual agreements,” according to court documents.

In April of this year, Pixelle Specialty Solutions Holding announced an agreement to sell Androscoggin paper mill to HIG Capital, a leading global alternative investment firm headquartered in Pennsylvania. Terms of the deal were not disclosed, but the sale was supposed to be completed in the second quarter of this year. It is unclear whether this happened.

local reaction

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

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

Jay selectors and officials will discuss filing a fifth application for the Maine Sudden and Acute Disorder Evaluation Program, Lavrinier said.

The state lowered the city’s valuation by $201.1 million annually for 2019, 2020, 2021 and 2022, after the city filed for relief. The revised assessment 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 February 2 from Deputy Director Stephen J. Sally, supervisor of the property tax division at municipal services.

In February, the state downgraded the city for the fourth time since 2013.

Domestically, the value of Androscoggin Mill and associated property increased by $30342 to $109.84 million for the 2022-23 valuation, according to information provided by the city’s valuation agent, Paul Bennett, of John E. O’Donnell Associates of New Gloucester in August. . The mill owners were to be charged a $1.8 million tax after the tax increase financing agreement was taken into account.

“I can’t say I’m very surprised,” said Glenda DePombo of Jay. She is the owner of Riverside Quick Station in Gay at the corner of Riley Road, where the factory is located.

There were more than 1200 employees in the factory. I remembered when it was difficult to find a parking space at the mill, but the number of vehicles parked there was significantly reduced.

As much as the plant has been downsized over the years, the store and gas station have kept their own, she said.

Mukhtar Lee Anne D’Alessandro, whose husband worked at the factory for nearly 40 years and retired 10 years ago, said they still know a lot of people who work there.

When she heard the news, her first thought was concern about employees losing their jobs, and second, she said, the impact of the factory closure on Jay’s taxpayers.

She said everyone was saying it was a “sad day” in town.

In 2000, there were 52 private companies in Maine engaged in the paper industry, according to some recent statistics.

This number dropped to 37 by 2010 and down to 19 as of March 2020.

In 2010, the paper industry employed 7,397 key people and paid a total wage of over $470 million.

By 2018, employment had fallen to 4,386 and wages had fallen to $336 million.

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

Carol Coltas, correspondent for the Portland Press Herald, contributed to this report

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