State’s $18 billion paper industry takes a hit, as new mill owner cites ‘unprecedented market decline’ due to COVID-19.
The historic Consolidated Papers mill in Wisconsin Rapids will close by the end of July, new owner Verso Corporation announced Tuesday.
Verso, citing “unprecedented market decline” due to COVID-19, will also close its mill in Duluth, Minnesota, by the end of June. Between the two plants, 1,000 workers will be laid off as production at both are indefinitely suspended, the company said. The Duluth closure will affect 235 employees, according to the Minneapolis Star-Tribune, meaning more than 750 in Wisconsin Rapids will be left unemployed.
Both mills could reopen “if market conditions improve,” close permanently, or be sold, Verso said.
“A full shutdown has never happened in the history of this mill, dating back to 1904,” said Rep. Scott Krug, R-Nekoosa, in a statement. “Today, the impossible became reality. Growing up in Wisconsin Rapids my heart hurts today like it never has before.”
Missy Hughes, executive director of the Wisconsin Economic Development Corp., said in a Tuesday afternoon media call that the WEDC was already working with Verso on “a creative solution to keep them open.”
Consolidated Papers was founded in Wisconsin Rapids in 1894 and headquartered there until it was purchased by Stora Enso, a Finnish paper company, in 2000. Stora Enso then sold the company’s mills to Ohio-based NewPage, which was in turn bought out by Verso in 2015.
“I am disappointed by the news that Verso Corporation plans to suspend operations at their Wisconsin Rapids mill and lay off their hard-working, dedicated employees,” Wisconsin Rapids Mayor Shane Blaser said in a statement.
About 650,000 Wisconsinites have made unemployment claims since March 15, according to data from the Department of Workforce Development. That was the week the coronavirus pandemic began to show adverse effects on the state and businesses began shutting down en masse.
The paper industry is one of Wisconsin’s largest, creating more than $18 billion in economic activity and employing more than 30,000 in 2018, according to a WEDC study released last August. When factoring in indirect economic activity, those numbers grow to nearly $29 billion in output and almost 96,000 jobs, according to the WEDC.
There were 34 mills in Wisconsin operated by 24 companies at the time of the study. Wisconsin also has the largest paper industry in the county by gross income, number of employees, and number of mills, according to WEDC.
Paper and printing demand in North America fell by 38 percent year-over-year in April, according to industry group Fastmarkets RISI.
“Wisconsin Rapids and its people have proven to be resilient,” Sen. Patrick Testin, R-Stevens Point, said in a statement. “This is a city that overcomes challenges.”
Testin said he has contacted DWD Secretary Caleb Frostman to help unemployed workers.
This story has been updated with a comment from Missy Hughes, executive director of the Wisconsin Economic Devlepment Corporation.