UPM-Madison to Cut Catalog, Brochure Paper Output for Two Weeks

 

The Bangor Daily News, Bangor, Maine, USA, reported this week that UPM-Madison’s paper mill plans to reduce production of paper for catalogs and brochures for two weeks, laying off hourly workers during the cutback a spokesman for the mill attributed to international competition, market conditions, and energy costs.

Russ Drechsel, manager of the mill and president of Madison Paper Industries, notified members of Maine’s congressional delegation about the shutdown starting January 24 to "on or about" the week of February 9, in a letter dated Tuesday of this past week.

Drechsel told the Bangor Daily News on Tuesday evening that the company is still planning the temporary cutback and layoffs that could extend beyond two weeks. "We’re still going through the planning process to say what positions we want to staff and what work we want to complete during the production curtailment," Drechsel said.

The mill employs about 220 people, of which Drechsel declined to disclose how many are hourly and how many salaried. He said not all hourly workers will be affected.

"We regret having to take this downtime, but conditions in the U.S. market for supercalendered paper, combined with the increased energy costs we incur during the cold winter months, require us to reduce production," Drechsel wrote.

In the letter, Drechsel complains to Maine’s congressional delegation about Canadian officials giving subsidies He estimated at more than $125 million to a competing mill in Port Hawkesbury, N.S. Drechsel wrote the mill has since applied for another $40 million from a national Forest Industry Transformation Fund.

Members of the congressional delegation said they will confer with federal trade officials and the White House about those subsidies.

"We have raised concerns regarding the unfair subsidies received by the Port Hawkesbury paper mill directly with the U.S. trade representative, and we will continue to press the Obama administration to investigate this subsidy and pursue remedies," U.S. Sens. Susan Collins and Angus King said in a joint statement. "We will continue to fight unfair trade practices that threaten Maine jobs."

Drechsel said that subsidized competition from the Nova Scotia mill makes it difficult for the Madison mill to offer a competitive price as it faces rising power costs during the winter. He noted that power costs combined with what the company sees as unfair trade competition from Port Hawkesbury fueled the decision to shut the Madison mill temporarily. "You take the combination of cost side pressures and revenue decreases because of the subsidies to the Canadian mill in Port Hawkesbury and that puts tremendous pressure on us," Drechsel said.

Gov. Paul LePage issued a statement late Tuesday saying the temporary layoffs is one example of "why the Legislature must act to do something about Maine’s high energy costs."

The mill’s annual output is about 200,000 tons of supercalendered paper.