Logging Expert: Wickliffe Paper Mill Closure a $600M Hit to State Economy
UPDATE: 2:30 p.m.
In addition to the loss of more than 300 jobs, Thursday’s news of the "indefinite idling" of the Verso paper mill in Wickliffe, Ky. means a $600 million hit to Kentucky’s economy. That’s according to a University of Kentucky professor who prepared a study last year on the economic impact of Kentucky’s paper industry.
Jeff Stringer, who is also the director of the Kentucky Master Logger program, says two plants – The Verso mill in Wickliffe and the Domtar mill in Ohio County – represent $1.2 billion of the state’s economy.
“I mean food and groceries and trucking and everything else that’s associated with those jobs, okay, logging and everything else," Stringer told WKMS News. "So you’re talking about $600 million out of the economy and it’s in your area. It ain’t distributed to Pike County.”
Stringer said the closure will force many loggers to shift away from paper wood, because the Domtar mill in Hawesville only works with chips from sawmills. He said the Verso mill used around 1.2 million tons of pulp wood and chips every year, with 40-50 percent of that coming from in-state from as many as 300 different loggers.
Citing high operating costs and declining demand, the Verso Corporation plans to “indefinitely idle” its paper mill in Wickliffe, Kentucky, resulting in the layoff of 310 jobs.
In a press release, the Memphis-based paper company says the move is in response to increased foreign paper imports from Asia, Europe and Canada as well as high operating costs.
According to the Department of Energy, the Wickliffe mill has been operational since 1970. It has one machine with the capacity to produce 280,000 tons of coated paper and 30,000 tons of dried market pulp.
Verso President David Paterson says Human Resources will begin meeting with affected employees immediately.
"Decisions to reduce production capacity are never easy," said Paterson, in the release. "They are especially difficult for the employees and their families who are directly affected by these actions. Verso is committed to treating all of our impacted employees with fairness, dignity and respect and to communicating openly and honestly with each individual about how this decision will affect him or her."
The move comes only seven months after Verso bought the Wickliffe mill from previous owner NewPage following a year of negotiations. At the time, Verso stated that it planned to utilize "cost synergies" but that "layoffs were not on the table."
West Kentucky Workforce Investment Board Director Sheila Clark says they just heard the news and are developing a mediation process for workers.
“We’re trying to make arrangements to contact management of the facility to arrange for a rapid response that’s best for them, that we can set that up in the upcoming days to direct individuals looking for other employment or to prepare them for additional employment,” said Clark.
Ballard County Economic Development Director Terry Simmons would not comment directly on the closure but was surprised by the term “indefinite.”
Ballard County Judge Executive Vicki Viniard was unavailable for comment.
But mill workers aren't the only ones affected, the idling will also impact local loggers who provided lumber to the mill.
Alan Webb runs a logging company out of Fancy Farm that has supplied wood to the mill for three generations. Webb says he hauls hundreds of tons of wood to the mill on a weekly basis.
“Somebody will probably come in and start buying the paper wood, but I don’t know of anybody right now," said Webb. "I’ve got a guy working on selling mine, but whether he gets it done or not, I don’t know.”
Webb says his business won’t be hit as hard as some because he doesn’t exclusively log paper wood.
According to the Department of Energy, the plant procured its wood from six states in a 150-mile radius of the plant.
Along with the Wickliffe Mill, Verso is also shuttering part of its Androscoggin production plant in Jay, Maine, which result in the elimination of 300 jobs. Together, this will reduce its Verso's total production capacity by 430,000 tons of coated paper and 130,000 tons of dried market pulp.
The layoffs are expected to occur sometime in the fourth fiscal quarter.
Verso is one of the leading North American producers of coated paper products and operates 8 mills across the United States (including the Wickliffe and Maine mills) producing 3.6 million tons of paper products per year.