U.S. PAPERMILLS …….SHUTING DOWN

[Anonymous]

papermills being ripped apart
Foreign competition impacting U.S. paper-mill industry
PARK
FALLS, Wis. 4/06 – Tom Ratzlaff is mayor of a small town reeling from
the closure of its more than 100-year-old paper mill. And he is among
the 300 workers who lost a good-paying job, his livelihood for nearly
three decades.”Some days, I just wake up and I don’t know what I am
going to do, but you just got to keep going,” said Ratzlaff, 45. “You
can only cry in your beer for so long.”What Park Falls faces is not new
among cities with strong links to an industry that has made Wisconsin
the No. 1 paper producer in the United States for decades. The
part-time mayor has plenty of company at the unemployment line.New
competition from foreign paper makers, a recession at the turn of the
century and innovations such as e-mail and online advertising that have
tamped down demand for traditional papers – have hurt an overbuilt
industry all over the United States, said John Mechem, a spokesman for
the American Forest and Paper Association in Washington,
D.C.Nationally, 95 paper mills have closed and 123,000 jobs have been
eliminated since 2000, he said.Since the late 1990s, Wisconsin has lost
more than 17,000 jobs, or 30 percent of the work force, at paper mills,
pulp mills and converting operations and five mills have either closed
or are in the process of closing, according to the Neenah-based
Wisconsin Paper Council, an industry group representing 25 paper
companies with factories in the state.Ratzlaff said he was aware of
that trend but saw it as a positive for him and his mill.
“You were
always hoping that was enhancing your ability to stay open,” he said.
“Many of those that have shut down were competitors for this
mill.”Patrick Schillinger, president of the Wisconsin Paper Council,
said more job cutting was likely.He said the jobs – some of the
highest-paying manufacturing careers in Wisconsin – are gone
forever.”You will probably see more consolidation or mergers within the
industry,” he said.
Recent developments highlight a trend that Schillinger said started at least seven years ago:
* Smart Papers LLC of Hamilton, Ohio, closed the Park Falls mill barely a year after buying it from Toronto-based Fraser Papers.
*
Glatfelter Co. has announced plans to close a Neenah plant that makes
specialty papers by June 30, costing 200 workers their jobs.
*
Riverside Paper Corp. has said it will close its mill in Appleton,
founded in 1893, eliminating about 100 jobs making specialty papers.
According
to Schillinger, paper- and cardboard-making jobs in Wisconsin peaked at
54,300 in July 1999 before plunging to 36,800 in January.
The job
losses, in part, occurred as a once mostly regional industry faced new
competition and lower prices from paper makers in China and South
America, industry experts say.Printers can buy paper cheaper from China
than walking down to a local mill, Schillinger said. For some products,
prices have rolled back to 1996 levels just to compete, he said.Tom
Howatt, president and CEO of Wausau Paper Corp., which operates mills
in Wisconsin, Minnesota, Ohio, New Hampshire and Maine, said prices for
some writing papers are down 10 percent from just five years ago.In
addition, according to Schillinger, during the “roaring” economy of the
1990s, U.S. manufacturers expanded to produce more paper. Then a global
recession hit, easing demand, followed by the growth of new technology
unfriendly to paper makers, he said.The business use of e-mail,
companies doing more work online and the growth of online and Internet
advertising reduced the need for paper, a drop that could not be offset
by a growth in paper used in homes because of computers and printers,
Schillinger said.”It was sort of the perfect storm,” he said. “All of
those factors have meant a leaner paper industry.”
For Park Falls, a
city of 2,800 carved out of a forest in northern Wisconsin and
nicknamed the ruffed grouse capital of the world, the mill’s sale to
SMART Paper a year ago rekindled hopes about the factory’s future.
The
sprawling plants mill sits just a block off the city’s main street,
dominating the downtown landscape along the Flambeau River. A yard is
piled with 120,000 cords of logs, a mountain of wood waiting to be made
into paper.
SMART Paper filed for bankruptcy in shutting down the
mill, citing unprecedented high fuel costs and “rapid deterioration” of
market conditions.
“Most people have the feeling that they just came
in and bled the place dry and that was it,” said Ratzlaff, whose wife,
brother-in-law and sister-in-law also lost jobs in the shutdown. “A
couple of weeks ago, somebody wrote on a piece of paper, ‘Place for
sale’ and put it up front.”
On average, the mill’s workers earned
$17 an hour, and jobs just don’t exist to readily absorb them, Ratzlaff
said. The ripple effect of the closure hits at least 300 loggers, he
said.Gerry Ring, professor of paper science at the University of
Wisconsin-Stevens Point, the only college in the state offering such a
degree, said the mill’s closing has more to do with outdated, less
efficient paper making machines than anything else.
“What should
have happened a long time ago, at a lot more of the mills, if they
wanted to keep the market, was reinvest in modern machinery,” he said.
“We could make good paper on old machines far longer than we should.
Eventually, the costs get to you when the latest and the greatest comes
on line, and then all of a sudden, ‘Oh my God. They can make in a half
a second what it takes us an hour to make.”‘Ring believes that the
continuing rise in energy prices will ultimately lead to a resurgence
of regional paper markets for the industry as transportation costs
rise.”You are not going to make paper in China and sell it in Wisconsin
ultimately. They can do it for the short run, but oil prices will
change that whole picture,” he said.
Jim Stueber, owner of True
Value Hardware in Park Falls, called the paper mill the life of the
community, and said so far his business hasn’t been hurt. In fact, it’s
picked up a little and that worries him.
“They are fixing their homes up,” the businessman said. “I have a feeling they are fixing them up to move.”

[Author]

April 24, 2006 at 10:06 AM