Verso Corp. has decided not to bring back 120 employees laid off earlier this year after the company idled its No. 3 paper machine in Jay.
Verso announced Tuesday it will shut down that machine permanently in response to declining demand for coated paper, used in magazines and other glossy publications.
The company announced last fall that it would make the layoffs permanent if it could not find sufficient customers for products coming off the No. 3 machine.
Verso CEO B. Christopher DiSantis said in a news release that the company is positioning its mill in Jay to focus on specialty paper products, like grease-resistant paper for packaging or wrapping food.
“Although the footprint of the Androscoggin Mill is getting smaller, we continue to take steps to position the facility as a leading producer for the growing specialty papers market,” DiSantis said.
The company said employees will receive severance and the company’s human resources team will begin scheduling individual meetings with employees to provide them more information. The mill has about 400 employees.
The layoffs come after a period of transition and turbulence for the company, which in early 2015 borrowed heavily to acquire its larger competitor NewPage.
Eight months later, it announced it would lay off 300 employees in Jay and shut down its No. 1 pulp dryer and No. 2 paper machine, bringing the total headcount to about 565.
In early 2016, the company filed for Ch. 11 bankruptcy protection. Verso exited its bankruptcy restructuring last summer, a move that restructured its debt and freed it up to sell certain types of specialty paper in Jay that it previously made under contract for Expera Specialty Solutions.
The company has struggled for years with global decline in demand for coated paper.
During its bankruptcy case, Verso pointed to industry sources to show that U.S. coated paper demand dropped 16 percent from 2010 to 2014, a time when imports also put pressure on domestic producers of coated paper.
The shutdown of the No. 3 machine cut Jay’s coated paper capacity by about 200,000 tons annually.
The Professional Logging Contractors of Maine in November lamented news of the layoffs, saying the capacity reductions put the logging industry “at a critical point” because of the loss of so many markets.