Consumables
Katahdin Paper Company Announces Indefinite Closure of Millinocket Paper Machine; Cites Record High Oil Prices
Monday 02. June 2008 - Katahdin Paper Company LLC ("Katahdin" or the "Company") announced today the indefinite shutdown of its 180,000 ton per year supercalendered paper machine at its mill in Millinocket, Maine. Paper produced at the mill is used in the magazine, catalogue and retail insert industries. The closure is expected to take effect July 28, 2008 and is for an indefinite period.
Katahdin’s directory papers business (including two directory paper machines and related pulp and energy operations located in East Millinocket, Maine) is unaffected by this announcement.
“Despite continued operational improvement at the mill since its re-start in 2004, sharply rising input costs have prevented us from creating a sustainable business at Millinocket,” said Peter Gordon, President and Chief Executive Officer of Fraser Papers Inc., manager of the Katahdin paper operations. “The root cause for today’s announcement is record high oil prices which have doubled our fuel costs over the last twelve months. In 2007, the Millinocket mill consumed over 400,000 barrels of oil to generate heat and steam for the paper-making process. As with many other paper mills which are dependent on fossil fuels, a secure and more economic energy source, combined with significant conservation, is required for this operation to be viable in today’s business environment.”
The closure will impact approximately 208 hourly and salaried employees. The Company will work with local Government agencies to assist individuals affected by this announcement. The facilities will be maintained such that operations can re-start on an expedited basis should business conditions improve. In addition, with the assistance of the Office of the Governor, the Company will continue to explore all options that could further resolve the challenges being faced by the mill.
Katahdin Paper Company is a leading North American producer of high value directory and SC-A groundwood papers. The Company has operations in Millinocket and East Millinocket, Maine.