BREWER – Eastern Fine Paper Inc. of Brewer, currently undergoing Chapter 11 reorganization, announced Thursday that it will be shutting down its No. 3 paper machine indefinitely and has laid off the 41 workers associated with that machine.

“This was a very difficult decision for us,” Joseph H. Torras Jr., Eastern’s president and chief operating officer, said Thursday. “The employees being affected here are terrific, valuable workers and we hate to hurt them. But business conditions require that the mill operate with utmost efficiency so that the future of our 400 other employees in Brewer will be secure.

“I am confident that with these measures, together with the great work being done by our marketing staff, the future for this mill is excellent,” he said.

According to Torras, the mill’s remaining paper machines have the capacity to absorb all of the tonnage that No. 3 has been making and can do so much more efficiently.

No. 3 machine is the mill’s oldest and smallest. No. 1 and No. 2 machines have received extensive modernization in recent years.

Donna Holland, the Brewer mill’s vice president of human resources, said Thursday that it appears the layoffs will be indefinite and possibly permanent.

The current plan is to mothball the machine, which she noted has been up and down for much of the past year and was out of commission for more than a year in the early 1980s.

“It’s a very hard thing to accept,” Holland said of the layoffs. Some of the affected workers have been with the mill for a long time, she noted. Mill officials intend to do all they can to help the employees, both by working with their union representatives and by seeking federal and state employment retraining assistance.

According to Torras, the layoffs represent a significant step in the company’s efforts to return to financial health.

On Sept. 22, officials from Eastern Pulp & Paper Corp., parent company of the Eastern Fine paper mill here, filed for protection from its creditors under Chapter 11 of the Bankruptcy Code. In its petition, the corporation, which also owns a mill in Lincoln, lists debts totaling $181.3 million and assets of $187.8 million. The Brewer mill accounts for $70.65 million of that debt and $73.84 million of the assets.

George J. Marcus, a Portland attorney representing Eastern Pulp & Paper, previously said it could take nine months to a year for the company to come up with a reorganization plan.

At the time of the court filing, Joseph H. Torras, Sr., the company’s chairman, cited depressed printing and writing tablet markets, higher energy and raw material costs and the need for major environmental improvements as reasons for Eastern Pulp & Paper’s financial difficulties. He said the company anticipated recovering successfully and emerging stronger and healthier. Torras said the company intended to keep both mills open.

Chapter 11 protection is designed to shield the company from its creditors while it works to restructure and pay its debts.

According to city officials, the company has kept them abreast of all developments as the reorganization process has unfolded.

City Manager Stephen Bost said last month that the Eastern Fine mill in Brewer accounts for about 5 percent of the city’s tax base, making it one of the largest taxpayers.