Verso Paper makes transition as stand-alone

ORLAND – Verso Paper, the newly created company that owns paper mills in Bucksport and Jay, is well positioned in the coated paper industry in terms of production and customers.

One of the challenges it faces, however, is on the organizational side as it makes the transition from a division of International Paper Co. to a stand-alone corporation, according to President and CEO L.H. Puckett.

Puckett spoke briefly Thursday at an informal luncheon for area community and business leaders. He and other top company executives, many of whom came over from IP to Verso, were on a whirlwind tour of Maine that included stops in Bucksport, Jay and Augusta.

“This is a very exciting time for Verso Paper,” Puckett said. “We are one of the strongest stand-alone paper companies in North America.”

The company is a key producer and supplier of coated paper, he said, noting that approximately one in five major catalogs and magazines is printed on Verso Paper.

“We’re a big player in a big market,” he said, “but we have a lot of heavy lifting ahead of us.”

The company will continue to be strong player in that market, which is focused on light-weight coated paper, Puckett said. As postal rates and delivery costs continue to rise, customers are looking to save money.

“What we do in Bucksport plays into that,” he said.

Apollo Investment, a privately held New York investment company, purchased the coated paper division from IP in August for $1.4 billion. The sale included the two mills in Maine as well as mills in Quinnesec, Mich., and Sartell, Minn. The company has 14 paper machines in those mills and employs about 3,000 people.

One of the challenges the company has faced in the changeover has been to develop in-house support functions for the papermaking operations. As part of a larger corporation, many of those resources, such as information technology, human resources and financial support, are shared among different divisions.

“The biggest challenge we have is to build those capabilities in house as we stand alone,” Puckett said. “That’s been the biggest initial challenge for us.”

Puckett said the company has maintained some ties with IP as Verso develops its own capabilities in those areas.

Being a stand-alone also has some advantages, he said, both in terms of the operations and personnel.

“We can be very focused,” Puckett said. “We can prioritize very effectively to maximize the performance of the business.”

As a stand-alone, Verso has the opportunity to develop and challenge employees in the mills in a way that has not been done before and to share individual expertise among the company’s mills.

Employees at the Bucksport mill seem excited by the challenges and opportunities, he said.

“There is a lot of positive energy at the mill,” he said.

The company will continue to invest in the business, Puckett said. In Bucksport, he pointed to the $14 million debarking machine project begun by IP and a $5 million project that will handle new materials from the Jay mill. The Bucksport operation will purchase pulp produced at the Jay operation, an arrangement which will benefit both mills.