PULP AND PAPER FUTURES

Once the king of Maine’s economy, the paper and pulp industry’s transformation over the last 30 years has led to a perception that it is dying a slow death in the Pine Tree State. But don’t write that obituary just yet.

High-profile mill closings and paper company sales in recent years might suggest that in Maine, the industry is playing out its end game, perhaps in anticipation of consolidating in the South. While it’s true that the industry’s golden age here may have ended in the late 1970s, the paper industry in Maine and nationwide is still successful, though under a different business paradigm.

The recent news that Verso Paper, parent company of the coated paper mill in Bucksport, offered its stock publicly to raise capital may have further clouded public perception. The facts are that employment is down, but production is steadily up. These contrary trends have fueled the perception of decline.

But Maine’s mills, for the most part, are profitable, according to Economic Development Commissioner John Richardson. And that’s good for Maine.

Or course, the paper industry has seen its share of curveballs over the last 30 years. The Clean Water Act and other regulations ended the use of rivers to move pulp to mills and eliminated a cheap, though unconscionable, means of disposing of waste. NAFTA brought cheaper Canadian pulp imports, blessing buyers but cursing harvesters. Workers compensation reform eased some costs, as did technological advances that allowed clear-cutting several acres in a day. A reaction by environmentalists, and much of the public, changed the controversial harvesting practice.

In the last decade, sweeping changes in land and mill ownership came. Some mills closed, then reopened with vastly fewer jobs. After Plum Creek landed in Maine, it introduced a business model not seen here before: marketing timberlands for housing and recreation. More changes are likely, as the Northeast looks to Maine’s abundant forests to ease reliance on fossil fuels.

Fewer jobs in Maine mills is not a great outcome. Forty years ago, many Mainers had a relative, neighbor or friend who worked at the local mill, pulling down a good paycheck. According to the Maine State Planning Office, in 2006, 17,800 jobs in Maine were in forest products businesses, just 2.9 percent of employment, compared with 9.7 percent in leisure and hospitality businesses.

According to The Center for Paper Business and Industry Studies, pulp and paper ranks among the top 10 employers in 43 states, but beginning in the 1970s, the industry began relying less on “the craft knowledge of skilled operators,” and instead used computer-operated, automated paper-making equipment.

Commissioner Richardson said the nature of the jobs has changed, with engineering and computer expertise now valued; as a result, salaries are up to the $50,000-$60,000 range. Key to pulp and paper’s future is a reliable work force, he said, especially since the average age for mill workers is 54.

The CPBIS notes that pulp and paper must become more adaptable to changes in the global marketplace. Being nimble in the face of such changes is not natural for the industry, it notes, but there are signs that it is learning.