Great Northern to trim paper production for 2 weeks

MILLINOCKET – Great Northern Paper Inc. will temporarily curtail production on two of the four paper machines at its Millinocket mill beginning Monday.

The two-week production curtailment will affect about 100 employees at the mill. Employees, whose vacation-scheduling period runs from May to May, will be able to take existing vacation time or can use upcoming vacation time, according to a company official.

GNP President Eldon Doody announced the production curtailment to employees in a company e-mail about 3 p.m. Thursday.

“Difficult market conditions and a shortage of orders for specialty and coated paper grades necessitates a temporary curtailment of part of the Millinocket mill,” Doody told employees.

The production curtailment will begin at 7 a.m. Monday and will run through April 1, if the company obtains sufficient orders. Employees said the curtailment could be extended if the company does not obtain sufficient orders.

Brian Stetson, GNP’s spokesman and director of environmental affairs, said the company believes it will have orders. “But this is a tough market. We will have to wait and see,” he said.

Doody told employees the company will closely monitor the markets during the production curtailment.

The curtailment will mean two older paper machines – Nos. 7 and 8 – and the off-machine coater complex, which places a glossy coat on the paper, will be shut down temporarily.

Production will continue on paper machine Nos. 10 and 11 and the pulp mill. Some support departments, such as maintenance, also will be affected.

Stetson said economists have declared the recession is over, but the paper industry typically lags behind.

“Orders for coated and uncoated groundwood specialty grades of papers have not yet seen a rebound,” said Stetson. “The market is still tough.” Coated and uncoated groundwood specialty grades of paper are those typically used in advertising fliers and catalogues.

Stetson said the company has orders for the No. 10 and the newly rebuilt No. 11 paper machines at the Millinocket mill. “We hope our order book will get stronger as the year progresses,” said Stetson.

The production curtailment marks the second in the last five months, but Great Northern isn’t the only paper company experiencing soft market conditions.

Last month, International Paper Co.’s Bucksport paper mill shutdown four of its paper machines for a week. It was one in a series of shutdowns during the past year resulting from a lack of orders for the coated paper that the mill produces.

The Bucksport mill employs 1,060 people and produces lightweight coated papers used in magazines and catalogues. “We are optimistic,” said Keith Cunningham about future markets.

Market conditions for the paper industry are not good, according to John Williams, president of the Maine Pulp and Paper Association.

Williams said there were a number of reasons for the conditions, such as foreign competition, a strong U.S. dollar and high taxes and energy costs, particularly in Maine.

He said mills in Europe are very updated as the result of many recent investments and are producing more efficiently than many U.S. mills. He said new facilities have come on line in Latin America and Asia. “They have the advantage of cheaper labor, fast growing trees and looser environmental regulations,” said Williams. “Just the fact that our dollar is strong is making it hard for mills in the U.S. to compete. Here in Maine, we have higher taxes and higher energy costs than other states.”

Williams said Maine mills were having difficult times, but he expects business at Maine paper mills will pick up like other mills nationwide.