JAY — A day after Verso Paper announced it would close its Bucksport mill by the end of the year, people here said they sympathize with the 570 workers who will lose their jobs.
They know the effects of a mill closing.
Wausau Paper closed its Otis Mill, which straddled the Jay and Livermore Falls line, in 2009, putting about 200 workers out of jobs.
“I was surprised and saddened to hear of the (Bucksport) closing,” Jay Town Manager Shiloh LaFreniere said. “I feel terrible for all of the workers and for the community. As manager of Jay, I know firsthand how much of an impact this will be to the people of Bucksport, and my thoughts are with them.”
Livermore Falls Town Manager Kristal Flagg predicted a difficult time for the Bucksport community.
“The closing … is a devastating situation not only for the employees but the entire community,” Flagg said. “My heart goes out to all of them.”
Livermore Falls, where most of the Wausau paper machines’ value was assessed, received Sudden and Severe Impact aid from the state because the town lost $30 million worth of valuation when the mill closed. The aid is disbursed when a town suffers a significant loss of taxable value.
The mill workers have moved on, with some finding jobs in the paper industry, including at Verso’s Androscoggin Mill in Jay. Others went to school and have found jobs in second careers, though many do not pay as well as the paper mill jobs.
However, the towns saw a ripple effect on their economies, which also is likely to affect the Bucksport area, not only the company’s employees but the businesses the mill uses and that the mill workers frequent, as well as the loggers who provide the wood and trucking services.
Verso officials said the Bucksport mill had not been profitable for a number of years, in spite of its employees’ dedicated efforts to make it so, according to a release.
“Our assessment indicates that it is impossible for the mill to achieve profitability in today’s marketplace,” said Dave Paterson, president and chief executive officer.
The declining demand for paper and the mill’s rising costs, especially for natural gas, were major factors in the decision to close the mill, according to the Bangor Daily News.
The high cost of operating the Otis Mill and high energy costs were also cited as factors in the closing of the Wausau paper mill.
Verso officials said they plan to work with their affected employees and their customers to help them through the closing.
“I am very sad about the Bucksport closure,” said state Sen. Tom Saviello of Wilton, who retired from the Verso mill in Jay.
“My thoughts go to my friends and employees who work there,” he said. “It is a stark reminder of how fragile the paper manufacturing business is. I am not sure how it will affect the Androscoggin Mill, but I will be glad to work with Verso to ensure its viability into the future.”
The Bucksport closing will have virtually no impact on the Andro operations or employees, Robert Mundy, Verso senior vice president and chief financial officer, said Thursday. “We still expect to close the acquisition of NewPage in the fourth quarter.”
Verso is in the process of acquiring NewPage Holdings and its seven mills, including one in Rumford.
If completed, the merger would give the joint company 10 mills, not counting Bucksport, and about 1,730 employees in Maine, according to the Bangor Daily News.
Jay recently had a revaluation done on Verso’s Androscoggin Mill that resulted in a 27 percent decrease from $815.4 million of taxable value last year to about $592 million this year.
The town began a revaluation earlier this year on the mill properties after Verso Androscoggin LLC requested a tax abatement in February for $469 million in valuation for 2013. The town valued the mill and property at $929 million in 2013. The town has until Dec. 1 to make a decision on the abatement request.
The town taxed Verso $9 million last year, factoring in two tax-increment financing agreements. This year, after factoring in the agreements, the taxes are about $8.47 million.