ND Paper on Friday became the second Maine paper mill this week to announce business realignments that will result in layoffs.
A company spokesperson confirmed there will be layoffs at the Rumford mill as it refocuses production to expand into packaging grades of paper as sales of other paper grades declined steeply due to the coronavirus pandemic.
Pixelle Specialty Solutions also said Wednesday that it would lay off another 67 workers at its Jay mill, the third round of cuts this year, as it continues to recover from a digester explosion in April.
“The decision is a very difficult one as it will impact the numbers of our dedicated workforce,” said Brian Boland, vice president of government affairs and corporate initiatives at ND Paper’s U.S. parent company in Dayton, Ohio. “In order to position the Rumford mill and company to remain viable and sustainable for the long term, work redesigns and reconfigurations across the business are necessary.”
He said that the exact numbers and timing of layoffs are yet to be determined.
ND Paper, a wholly-owned subsidiary of the Chinese Nine Dragons Paper Holdings Ltd., has had its share of challenges this year. It had a novel coronavirus outbreak at the Rumford mill in September. More than 30,000 gallons of pulping chemicals from the ND Paper mill in Old Town leaked into the Penobscot River earlier this month.
ND Paper acquired the Rumford mill from Canada-based Catalyst Paper in 2018. ND Paper also owns another mill in West Virginia and the Old Town mill, which it purchased in 2018 and reopened in August 2019.
The Rumford mill now has three paper production lines, kraft and mechanical pulping assets and a pulp dryer. The products are heavily weighted toward bleached grades of paper for the printing and writing markets, which have been hit hard by the pandemic. The company said demand for those papers has plummeted.
Sales of the coated woodfree and coated mechanical papers made in Rumford are expected to fall 23.5 percent and 30.3 percent year-over-year, respectively, equivalent to over 1.4 million tons of output.
ND Paper CEO Ken Liu said the demand drop happened much more quickly than expected.
“Moving our largest Rumford machine into packaging grades helps to balance the deteriorating printing and writing market in North America, while simultaneously positioning us into bigger and more stable packaging paper markets,” Liu said.
The realignment, which the company expects to complete by the end of this year, includes converting its printing and writing machine to produce lightweight, high-strength kraft linerboard products. It also will expand production on another paper machine to include unbleached recycled bags and converting papers. It will permanently stop mechanical pulping and coating and supercalender operations.
It will continue to make printing and writing products for existing customers on a different machine.