BANGOR, Maine — Executives from three of Maine’s paper mills told 50 businesspeople that reports of the demise of Maine’s pulp and paper industry have been greatly exaggerated.
“Maine is 92 percent forested,” said Keith Van Scotter, president and CEO of Lincoln Paper and Tissue. “If paper and pulp is going to be made anywhere, it’ll be made in this state, so it’s not a dying industry. It’s a viable industry.”
Van Scotter; Bill Cohen, director of communications for Verso Paper Corp. in Bucksport; and George McLaughlin, manager of manufacturing for Great Northern Paper in East Millinocket, were the main speakers at Wednesday morning’s Bangor Region Chamber of Commerce Early Bird Breakfast.
Van Scotter added that pulp and paper is being used to make rayon clothing in the Far East, opening up a whole new market.
Cohen provided some interesting facts to show how crucial the industry is to Maine’s economy. He said there are more people employed nationally in the pulp and paper industry than in the auto industry, and that the average paper industry job in Maine pays about $60,000 a year. He added that $450 million in annual salary checks are sent out by Verso to employees with Maine addresses.
Chamber president and moderator John Porter asked the panelists about what workforce issues they face now and in the future.
McLaughlin talked about the graying of the current workforce and a shortage of younger, skilled workers to replace them.
“Our average age in the workforce now is 57, so we have a challenge in hiring younger workers with the right skill set,” he said.
Talk shifted to the cost of doing business, specifically electricity.
“The main issue is our general lack of access to natural gas. We need a pipeline,” said Van Scotter. “Another is this state’s overbuilding of our electrical grid.”
McLaughlin talked about the prohibitive expense of having to run a backup boiler on oil recently.
“Oil is not an option to make paper today. It’s too expensive,” he said. “We need that pipeline. We could be around for a long time, but without that, who knows?”
The price of oil is making transportation expensive as well.
“The biggest factor is cost of fuel,” said McLaughlin. “If we could get more customers converted to rail, it would lessen our cost considerably.”
Cohen said as little as two years ago, 70 percent of shipping by his mill was done by rail and 30 percent by trucks. Now it’s 40 percent rail and 60 percent trucking.
The rising costs of toll roads is making shipping by truck even more costly.
“Our toll cost per travel mile is almost 50 cents per mile,” said Van Scotter.
Expanding shipping by railroad, expansion of Maine’s rail network, and building an east-west highway were all on the three executives’ wish lists.
“Everything that comes to our plant comes by truck,” said Van Scotter. “Everything that leaves goes by truck. The east-west highway would be a big help.”
Porter asked the panel about the federal and state regulation of the paper industry.
“First, compliments to the governor and Legislature for looking at regulations to make it less cumbersome for business while still protecting the environment,” said Cohen.
Van Scotter said although Maine is more heavily regulated than many other states, it’s ongoing trends in federal regulation that cause concern.
“This presidential administration is worse, and the previous one wasn’t much better,” Van Scotter said. “It’s frightening.
“We’re all in favor of a cleaner environment, but if no one has a job, it doesn’t do much good.”
One of the last topics was competition, specifically from foreign countries.
“We’re in a global economy and the new model has pluses and minuses,” said Cohen. “This gives us an opportunity, but it also has unique challenges.”
Chief among them are foreign tariffs, subsidies, wage rates and government aid.
“The biggest challenge is foreign companies with access to free and unlimited working capital, which we don’t have,” said Van Scotter.
McLaughlin referred to mills that are reopening in Quebec and Nova Scotia, citing the current U.S.-Canadian exchange rate as well as the subsidies the mills get from the Canadian government.
The event was the first of four in the Chamber’s “business revolution” topical programs. Others include the transportation and higher education bonds on the November ballot and a look at health care.
There is no better indication that a paper mill is in trouble than a press release announcing that it remains ‘viable’. Time to look for a new job folks.
And what executive position do you currently hold in the pulp and paper industry? Which mill do you run/operate. As usual, you have no idea what you’re talking about. You amuse me, bangorian. Keep up the good work.
Never easy when the Canadians are subsidizing. I hear it will be 125 million for the N.S. So much for free trade signed under President Carter, and a Republican Congress. Though Clinton did sign it.
You have been saying that crap for years, they are still running! Oh ya, no National Park for you.
The Bangor Daily News has incredible photojournalists. Why don’t they let them do their job? This photo is blurry. Lately many reporters have been taking photos for the paper and the quality is very poor. It would be better if the BDN would hire more photojournalists and let them cover all stories, and let the writers do the writing.
Digitial and auto focus on those camera’s are not always the best, especially in low light. No matter how good you are.
The Swiss were experts in watch making. Britannica excelled
publishing encyclopedias. Polaroid owned the photo market. Maine is the home of
the master papermaker. Van Scotter is
the only one who has a hope of surviving and growing in the tissue market. The
rest make products no one wants one wants or needs.
so true. i have been in the paper industry for 14 years and tissue is the way to go, you dont want to wipe your butt with a magazine.
Why do folks immediately jump on, The Sky is Falling, The Sky is Falling, bandwagon? The numbers are very clear that the mills are producing more tonnage of paper today than they did twenty years ago. It is simply an issue of technology overcoming brute strength which means they are manufacuring more with less people. So when a mill lays off people, it is immediately assumed it is because the mill is doing poorly. Last year the Verso Paper Company in Bucksport shut down a machine and laid off 125 good people. It was a headline story. Over the past year, every one of the people laid off (and who wanted to go back to work, as a large number simply retired) has been hired back. I haven’t seen story one about that!
Please tell me what other industry in Maine provides an average of $60,000 annual salary with a high school education? I know, I know, the mills are now expecting more education for new hires but the vast majority of PRESENT employees have no further education than High School. The call for higher education is due to the technology that has been incorporated into the paper making industry.
I understand that many people like to stop and stare at a train wreck. BUT I can’t for the life of me understand why some folks truly enjoy seeing others fail.
So why did some mills fail while others continue to succeed? Simply look at which businesses reinvested in themselves and which ones stripped the assets of the company out for short-term financial gain. It truly is not any different as to why some restaurants close and some are succesful. Some are just better at business than others. But I’m sure some folks will be quick to point out that restaurants are going the way of the textile and shoe industries. The Sky is Falling, The Sky is falling.
In Maine, paper production is about 1/4 of what it was 15 years ago. Of the manufacturers that are left, most are loosing massive amounts of money. The sad fact of the matter is that for most, their markets are drying up as technology moves on. There are some exceptions, but not many.
I’ve been in the business 35 years. It’s hard to watch it happen, but it does not much good to deny it.
Ah, but we must remember, Maine right on the Coast, a few years back, it would have been unheard of that we do not pack any sardines in this State. Maine is designated a retiree and recreation state for the well to do, these industries, needed or not, are on the list to be removed. The paper industry is next on the list. Once the paper industry is gone, Maine will have been conquered.
Hey George,hope you and your buddy fall into the hydro-pulper