JAY – International Paper announced Tuesday that it would shut down one of its oldest and costliest paper machines and eliminate 90 employees at its Androscoggin Mill in Jay by April 1.
The company is trying to lower costs and keep the mill competitive, its officials said.
IP also announced it would shut down a paper machine at Pensacola Mill in Cantonment, Fla., by early April and reduce its work force there by 120 employees.
IP has about 1,100 employees in Jay and about 800 employees at the Florida mill.
The decision to shut down these more costly, less efficient machines is an economic one, Androscoggin Mill spokesperson Fiona McCaul said.
“This is a difficult time for everyone as this will impact the lives and families of our team members who have worked very hard to make our mill successful,” said Androscoggin Mill Manager Rildo Martini. “We will do everything possible to ease the transition process for our employees.”
Maine Sens. Olympia Snowe and Susan Collins immediately announced the formation of a Franklin County community task force to assist the workers.
“This is a tough blow to the families affected and to a community that has been hard-hit in recent years,” the Republicans said in a joint statement.
They said they will join with state and community agencies to create the task force “that would help to provide job training and support services.”
The IP mills’ paper machines produce about 250,000 tons of uncoated free-sheet paper annually, with about 120,000 tons of that made by the No. 1 paper machine at the Jay mill, which is the one being shut down, McCaul said.
“It essentially comes down to cost and basically how much it costs to produce a ton of paper and how much it costs the competition,” McCaul said.
Certain grades and products from the machines being shut down will move to other mills within IP’s uncoated paper system.
It’s uncertain if the machines and associated equipment will be shut done permanently, but the company is offering severance packages to those effected, she said.
Employees at both mills were notified Tuesday of the decision, and mill representatives will be setting up meetings with affected individuals this week, McCaul said.
In Jay, those meetings will happen on Thursday and Friday.
The No. 1 machine at Jay is 40 years old and was one of the first paper machines at the Androscoggin Mill built in 1965. It produced bond paper and hospital forms, among other paper products.
It was not rebuilt, as were the No. 2, No. 3 and No. 4 machines, which make coated paper for catalogs, magazines and other products.
In 2003, IP invested $112 million to rebuild the No. 3 paper machine and upgrade other areas at its Jay mill after voters agreed to a tax-increment financing deal.
The No. 5 machine, the mill’s newest machine, was modified in 1992 and produces uncoated, lightweight, specialty-grade paper used in products such as popcorn bags.
“This is a first for the mill,” McCaul said, “that we would be taking down a major piece of equipment.”
Jay values the Androscoggin Mill and its personal property, land and buildings at about $753 million, and assessed the company about $12.4 million in taxes for 2004, said Jay’s assessing agent, Paul Binette.
The Florida mill has three machines, two paper machines and one market pulp machine that makes material for products such as diapers, said IP’s Florida mill spokeswoman, Heather Mills. The paper machine that will remain online makes legal and letter size paper.
Jay Town Manager Ruth Marden said the Androscoggin Mill manager called her Tuesday morning to give her a heads-up.
She’ll be contacting Binette and town attorney Michael Gentile to see what impact the announcement will have on the town. The TIF agreement has provisions to change the percentages of taxes paid to the town if a machine shuts down.
“Of course I’m concerned about the tax base but I’m more concerned about the people losing their jobs,” Marden said. “We have tried to be very business-friendly with IP and have worked with them on the environment and the TIF, and we hope to work with them again to get them to a point where they’re thriving again.”
Staff Writer Doug Fletcher contributed to this report
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