Officials investigating fire at Minn. Verso mill that killed 1 and injured 4

Posted June 07, 2012, at 5:42 a.m.

SARTELL, Minn. — At least four investigations continued Wednesday at the Verso Paper mill in the wake of the Memorial Day explosion and fire.

While a state fire marshal tries to determine what led to the fire and the Minnesota Occupational Safety and Health Administration analyzes how one person was killed and four others were injured, officials from Verso and its insurance company are finally able to access most of the plant — even though some areas are without power.

Those last two investigations will be most critical in answering questions about the mill’s future and efforts to put more than 250 people back to work.

“There are urgent concerns, which are short-term problems, and there are long-term issues, which are just as important to the situation we’re dealing with,” said Mark Phillips, commissioner of the Minnesota Department of Employment and Economic Development, who visited the mill Saturday with Gov. Mark Dayton. “The good [news] is the paper machine they’ve been using is intact. The bad [news] is that the fire took out their power plant. That’s a concern now and down the road.”

As Verso personnel try to recover infrastructure, including their information technology network, Phillips also pointed to the cost of power as one of many areas in which the state could act as an intermediary.

“They have competitive issues with things like the price they pay for power or the price they pay for pulp,” said Phillips, who visited with Verso CEO David Paterson and others. “I told them we’re going to look at helping them in any way we can. Maybe that’s as a facilitator to get someone to the table to work with them. We don’t know. There’s no evaluation yet by Verso, so we’re waiting on that. When they know what they need, we’d appreciate it if they’ll let us help.”

Government role

Phillips said there is an appropriate role for government in helping a private business recover from such a disaster.

“Usually that involves public infrastructure, but unfortunately there isn’t a lot associated with this,” Phillips said. “But there are things we can do, like private financing. We’ve helped other companies with flooding and fires in the past because the state can provide more flexibility in the terms, a longer window or maybe even a better rate than they could get elsewhere.”

Phillips said unemployment benefits will be available for workers laid off because the plant is down. No information was available on whether Verso employees have sought those benefits during the work stoppage.

Bill Cohen, a Maine-based communications and public affairs manager for Verso, said employees were being called to work at the Sartell mill on an “as needed” and “day-by-day” basis. He said it was impossible to say what percentage of the work force is on the job, because it is constantly changing.

Cohen said Verso employees affected by the plant shutdown should contact their human resources representatives to investigate their options.

“There are resources available to them,” Cohen said. “Hopefully those folks can do what they can to individually help each one.”

Big question

No one has yet addressed the question of whether the explosion and fire could be enough to permanently close the mill. Verso Vice President and Chief Financial Officer Robert Mundy has made statements indicating the company is eager to learn how long it will take to make repairs and get the plant operating again. But he also said it’s too early to make any educated guess on the future of the mill — good or bad.

“We know there are a lot of discussions going on and offers of help, and we’re thankful for that,” Mundy said. “But until we get a full understanding of what we’re dealing with, anything is guesswork.”

Phillips chooses to remain optimistic.

“I think they’re likely to restart,” he said. “They can’t leave it idle for very long. They need to get it up and running because you can’t let your raw material get old, and the way these mills make money is to crank out paper — 24/7 if possible.”

“They’ve got a labor piece that should run for a while, based on what the [United Steelworkers Union] has said,” Phillips added. “But you’re concerned when they’ve already shut down a couple machines and they’re fighting costs in their business that make it difficult to be competitive, and everyone knows the recession led to less advertising and a reduced consumption of some of the paper they make. We want to do what we can to get them started again so they’ll stay in Sartell and be competitive.”

A host of entities — including the city of Sartell, DEED, the Greater St. Cloud Development Corp. and others — are participating in an effort called the Verso Production Initiative. Sartell Planning and Community Development Director Anita Rasmussen said the group met Monday and plans to do so again next Monday. Verso Plant Manager Matt Archambeau has been the primary contact with the company and is likely to be at future meetings, Rasmussen said.

“The emergency response has taken priority until now. Our purpose is to help create a toolbox to help them move forward,” Rasmussen said.

Can’t afford to let go

GSDC CEO John Kramer said he wants to go beyond that and see if Sartell can help Verso gain a bigger share of what he says is a $45 billion industry.

“This was tragic, especially when there was a human life at stake,” said Kramer, who on Wednesday was in Sacramento, Calif., in an effort to land air service for St. Cloud Regional Airport. “But maybe there’s an opportunity here for (Verso) to become more competitive.”

He wondered whether a major modernization of the 105-year-old plant would be a consideration, or if there are untapped markets for Verso’s products, like wood pulp for renewable fuels plants.

“Verso’s impact to the state is dynamic — beyond the property taxes and the employees,” Kramer said. “They buy timber out of Bemidji. They have 27,000 acres of land near Alexandria. They make value-added products out of what we grow here and send them out of the state at much higher value. It has huge economic implications.”

Kramer said he felt it was a positive sign that Paterson met with Dayton and Phillips and on Tuesday met with Sen. Amy Klobuchar in Washington.

“I always want to be aggressive,” Kramer said. “Any time I meet with a company like this and they say ‘Thank you,’ I say ‘What else is there that we can do or become?’ ”

But he’s also concerned about what will happen.

“If your business is growing at 5 percent, you don’t have time to think, you’re just getting the orders out the door,” Kramer said. “But when there’s been a recession, or there’s an acquisition, or an event like (the fire), it gives people a chance to change their business. You don’t know what the new rules are going to be and we need to find out from Verso what that situation is. Our local business community needs to rally as allies for them so they realize they’re not in this alone. They’re an economic engine we can’t afford to let go.”

© 2012 the St. Cloud Times

Distributed by MCT Information Services

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