Louisiana-Pacific to close Baileyville mill

BAILEYVILLE – Louisiana-Pacific Corp. announced Friday that it would curtail production at its oriented strand board mill beginning Nov. 8, just three weeks before Thanksgiving.

The shutdown will affect around 100 hourly and salaried employees and is being blamed on poor market conditions and raw material costs.

L-P officials said the mill will start up when market conditions allow.

The shutdown will not affect the company’s Houlton OSB mill.

“We regret the impact that this curtailment will have on our employees in Woodland and on the surrounding community,” Jeff Wagner, L-P’s vice president of OSB said in a prepared release. “The people at our Woodland mill have done a great job of operating the mill efficiently to combat rising raw materials costs. Unfortunately, continued escalation of raw materials costs coupled with seasonally weaker market conditions make it necessary to make this difficult decision to curtail operations.”

Reaction in this small community of around 1,600 people was swift.

“You have to sympathize with people out of work. It’s really hard on families,” said Doug Jones, chairman of the Town Council. “Gosh, winter coming on and the price of oil going up and everything – it’s going to be a real hardship for all those employees that are out of work.”

Jones said he was surprised to learn of the layoff because he thought the multiple hurricanes that had hit the southern half of the country would have created more demand for the product. “You’d think with all the destruction in Florida they would be selling that for top dollar,” he said.

L-P spokesman Mary Cohn said Friday the demand for building products to board up businesses prior to the hurricanes only created a small blip in the market. She said the rebuilding demand had not yet started. “What we see with the hurricanes is you will see some increase in demand in that local area, but remember that’s only a small part of our overall production. We have a huge market all over North America,” she said.

Town Manager Scott Harriman, who has been on the job just a few weeks, said he learned of the shutdown Friday morning.

“They told me they are going to cease production on November 8th and layoffs are going to start effective November 19th,” he said.

Harriman, who had worked for the mill before accepting the town manager position, said he had no insight into the company’s future plans. “However, their press release said if and when market and raw material conditions improve they will reopen the mill,” he said.

The town manager said that he, too, was concerned for the employees and their families. “Louisiana-Pacific not only employs people from Baileyville but also many other towns in Washington County so it is obviously going to have a long-reaching impact on these employees and their families right now,” he said.

Asked what the town could do to help the laid-off workers, Harriman said the only assistance the town could offer was through the state’s general assistance program. “It is an income-based qualification program and should an employee need assistance through the winter and qualified based on income, they would be eligible for that,” he said.

This is not the first time employees have felt the bite of a shutdown. Last December, the company closed its doors for nearly six months because of poor market conditions.

L-P purchased the mill in 2002 from Georgia-Pacific Corp. The OSB mill had been operating on a limited basis for almost two years prior to that, and G-P gave pink slips to 115 salaried and hourly employees after the September sale.

Shortly after L-P assumed ownership, it announced that it planned to keep the mill closed, blaming the shutdown on market conditions. In June 2003, the plant resumed production.

Oriented strand board is an engineered panel product made of strands sliced from small logs and bonded together.

Shares of Louisiana-Pacific were up 5 cents at $24.86 in morning trading on the New York Stock Exchange.

L-P is a building-products supplier, delivering high-quality commodity and specialty products to retail, wholesale, home-building and industrial customers.