MADAWASKA, Maine — About 49 employees are expected to be laid off from Twin Rivers Paper Company’s Madawaska mill at the end of July, when the company plans to shut down its No. 3 paper machine.
The permanent closing of the No. 3 machine is part of a $12 million investment at the Madawaska facility that includes upgrades to its No. 8 machine designed to improve productivity and better position the mill for the future, according to a company news release.
Twin Rivers’ Chief Operating Officer John Reichert said via telephone Monday that he anticipates some of the affected employees will be interested in transitioning into “several open positions” at the mill, but that the majority would be laid off.
“Twin Rivers does not take these decisions lightly, and we recognize they will impact employment for approximately 49 of our valued associates,” Reichert said in the release.
“At the same time, we have a responsibility to make strategic decisions for the future of the company, our approximately 1,000 associates and the 5,800 people who rely on Twin Rivers’ operations across the regions in which we operate.”
The layoffs represent about 10 percent of employees at the Madawaska paper mill, which employs about 500 people. Twin Rivers also operates a pulp mill across the border in Edmundston, New Brunswick, and a lumber mill in Plaster Rock, New Brunswick, according to its website.
“We will work closely with these individuals and the unions to facilitate this transition, and provide whatever resources are available to assist them,” Reichert said.
Madawaska Town Manager Ryan Pelletier said in an email on Monday that he understands decisions about restructuring production at the mill “are strategic decisions that are in the best long term interests of the company and its future.”
Reichert said Monday that the company anticipates no changes regarding the number of workers needed on the No. 8 machine, either during the upgrade or once it is completed.
Reichert said he notified union leadership of the planned shutdown on Monday morning. The process for addressing such layoffs and working with affected employees is covered in the current bargaining agreement, he said.
“I fully anticipate to hear back from union leaders with suggestions about how to help these employees transition,” said Reichert.
Considering the number of paper mills that have closed in recent years, Reichert said he is unsure if other opportunities exist elsewhere in the state for the displaced Madawaska workers.
When Madison Paper Industries in March announced plans to shut down, it was the fifth major Maine mill closure, affecting hundreds of workers, announced in the last three years, after other facilities in East Millinocket, Lincoln, Old Town and Bucksport.
From the end of 2008 to the end of 2015, Maine paper manufacturing employment dropped by almost one-third, to about 5,241 from a little more than 8,000, according to data from the Maine Department of Labor.
Julie Rabinowitz, spokeswoman for the department, said the Rapid Response team was contacted Monday and would be setting up times to meet with the affected workers to provide information about re-employment, unemployment, health insurance and other resources.
“We estimate about 2,000 jobs have been lost in paper mills in the past year; however, our understanding of this situation is that the layoff is actually to allow for reinvestment in the mill, which is quite different for the overall community and other workers than other recent mill layoffs which have resulted in total closures,” she said in an email in response to a request for comment on the Twin Rivers announcement.
Reichert said that there may be opportunities for the displaced workers at Twin Rivers’ other facilities, but that the affected employees would be coming from a different union and would be starting at the bottom if they relocated.
Pelletier said the town would be working with mill management, state and federal agencies and the affected employees who are residents of Madawaska to assist them.
“Over the next several weeks, town officials and staff will be attending meetings with these partners to better understand how best the town can assist and be proactive moving forward,” Pelletier said.
The closure of one machine at Madawaska and upgrades to another are part of a “strategic realignment to focus on growth-oriented market segments and maximize productivity,” according to the press release.
“Our industry has undergone a great deal of change in the past decade, and we must continue to innovate and position Twin Rivers for the future,” Reichert said in the release.
The $12 million upgrade to the No. 8 machine, which is anticipated to be completed in 2017 is expected to “dramatically enhance the machine’s capabilities and broaden the markets served by the largest asset in the Twin Rivers paper mill system.”
The rebuilt No. 8 machine will be one of the largest producers of lightweight technical packaging and label specialties in North America, according to the company. The No. 3 machine is an older, slower and smaller machine that produces a variety of coated and uncoated grades, and it also is one of the mill’s higher-cost machines.
When that older machine is closed down in July, there will be four papermaking machines left in operation at the Madawaska mill.
With improvements on the No. 8 machine, the owners that took over in 2013 will have invested more than $47 million in the mill, according to the company.
Twin Rivers operates three additional paper machines that manufacture a range of specialty packaging, label and publishing papers.
BDN writer Darren Fishell and Fiddlehead Focus writer Jessica Potila contributed to his report.