WESTBROOK (AP) – Sappi Fine Paper announced Monday it is shutting down one of the paper machines at its Westbrook mill and laying off 170 of its 500 workers.

The decision reduces the historic mill’s work force to little more than one-tenth of what it was at its peak.

The company said the No. 14 paper machine, built in 1920, is outdated and unable to compete in the global market. Sappi is transferring its production of coated paper to its mill in Muskegon, Mich.

In addition, Sappi said it plans to eliminate 100 salaried jobs throughout North America over the next year. That could affect the company’s mill in Skowhegan, which has a work force of 900.

Sappi’s earnings were down 30 percent over the past year.

The company said the No. 14 machine had only one-seventh the output of the more efficient machines now in use worldwide.

“In today’s marketplace, it is critical that Sappi’s cost structure be made more efficient, so we are shutting our highest cost paper machine, and we are also taking other steps to build profitability,” said Kathy Walters, president and CEO of Sappi Fine Paper North America.

Sappi Fine Paper North America is a division of South Africa-based Sappi Limited, the world’s largest producer of coated fine paper. Its North American headquarters are in Boston.

A Sappi spokeswoman said the Westbrook plant will continue production of release papers, which provide surface aesthetics and texture to products such as footwear, clothing and flooring materials.

“It’s a very successful business that we will continue to focus our energies on,” Stephanie Hall said.

The company also will continue to operate its research and development center at the Westbrook site, as well as a recently expanded service center in the South Portland area that employs 300, she said.

Hall said workers were notified of the layoffs Monday and managers met with union representatives. She said the company will pay severance based on years of service and will support efforts by employees to find new jobs.

Messages left at Local 1069 of the Paper, Allied-Industrial, Chemical and Energy Workers International Union were not immediately returned.

The Westbrook facility is Maine’s oldest paper mill, dating back to the mid-19th century. At its height, in the 1950s, its work force exceeded 3,000.

Sappi acquired the mill in 1994 when it purchased the S.D. Warren division from Scott Paper Co.

The cuts announced Monday were the deepest at the mill since 1999, when Sappi closed the pulp mill and a paper machine, eliminating 315 jobs.

AP-ES-11-10-03 1541EST

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