AUGUSTA – The American Tissue Mills of Maine paper mill will close for four weeks because of cash-flow problems, putting about 80 full-time employees out of work.
The monthlong shutdown is the latest indicator of difficult times facing the plant’s parent company, American Tissue Inc. of Hauppauge, N.Y. All but 100 of 860 workers have been laid off at its mill complex in Berlin, N.H., and Gorham, N.H.
Kurt Goldschmidt, spokesman for American Tissue Inc., said these are tough times for the paper industry.
“We will be using our paper in inventory and converting it into finished product in order to generate some cash,” he said.
American Tissue’s Augusta plant has been running continuously since it opened in May 2000.
It has been operating two machines that convert wastepaper into tissue paper and can produce about 80 tons of paper a day. The large rolls then are sent to other American Tissue plants to be converted into market products.
The company reported in an earnings report Tuesday that it has increasing cash-flow problems and is in default under its revolving credit line. It said its liquidity problems are the result of weakness in the pulp market, low prices for commodity-grade paper, high energy costs and a limited availability of funds under its credit line.
In addition, American Tissue’s bond rating has been downgraded and it owes the city of Augusta more than $75,000 in property and equipment taxes, according to Mark Doyon, the city’s treasurer.
Paul Bernier of Augusta has worked at the plant for about 22 years and has been through shutdowns under previous owners. He intends to use his remaining week of vacation and then apply for unemployment benefits.
“We have a lot of paper on hand,” he said.
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