ISLAND FALLS, Maine — The National Starch and Chemical Co. plant in this Aroostook County town will cease production in June, laying off 37 workers, as part of efforts to streamline the company’s continental manufacturing operations.
“Because of its location and the size of the factory, Island Falls has higher logistical costs than National Starch’s larger facilities in North America,” Ron McCrimmond, the company’s senior director of North America manufacturing, said in a statement released Tuesday.
“In an economic period when demand is reduced, we have to take difficult steps to streamline our supply chain where possible,” he added.
The company began a meeting to inform its workers of the closure at 1:30 p.m. Town Clerk Cheryl McNally said she and other town officials were due to meet with company officials to discuss the situation at 2:30 p.m. The company is the largest employer in the town of 790 people.
Those displaced will be eligible for severance in accordance with the National Starch severance policy for salaried employees or the collective bargaining agreement for the hourly team, company spokesman Damian Proulx said.
The closing culminates a slow erosion of the company’s presence in town that began in 2002 and most recently continued when the company laid off 22 workers in closing its wastewater treatment facility in September 2007 as part of a strategic review of the firm’s global manufacturing capability.
The company, which makes food-grade starch for processed foods and for industrial products and processes such as papermaking, once employed about 70 people.
A layoff in 2002 saw 12 workers cut. At the time, those layoffs were attributed to continuing slow business conditions.
National Starch and Chemical Co. is a member of the ICI Group, a worldwide manufacturer of adhesives, specialty polymers, natural polymers and electronic materials. It has operated the Island Falls facility since 1976.
The Island Falls plant was built in the 1950s by a group of area farmers to make starch from potatoes. Since then, the facility, located on Burleigh Street along the shore of the West Branch of the Mattawamkeag River, has changed hands three times, the latest in 1997 when ICI bought National Starch for $8 million.