The Verso Paper Mill in Wisconsin Rapids ceased production at the end of July 2020. Angela Major/WPR

The sale of a closed paper mill in Duluth, Minnesota will bring at least 80 jobs to the area. This is the latest move affecting Wisconsin paper industry workers.

Verso Corp. announced on Monday that it will sell its Duluth plant to Virginia-based ST Paper and Tissue, which employed more than 200 employees in the Duluth-Advanced area before it closed last year. The company also operates a factory in Oconto Falls and is reported to invest US$54 million to transform the Duluth factory into a manufacturer of recycled paper napkins and other paper towels. 

This is part of the broader shift in the paper industry felt by other manufacturers and related industries in Wisconsin, such as logging. The two growing parts of the paper industry are the production of recycled products and the production of corrugated cardboard for shipping boxes.

Paul Fowler, executive director of the Wisconsin Institute of Sustainable Technology, said: "This is a direction we see the industry developing: the conversion of factories to manufacturing packaging, and the opportunity to manufacture recycled cardboard are also very attractive to manufacturers." 

The sale of the Verso plant followed the announcement last week that South Carolina-based Domtar was sold to the Canadian company Paper Excellence for $3 billion. Domtar operates factories in Rothschild and Nekoosa. A company spokesperson said that the sale will not affect plant operations, but Domtar has already remodeled other plants. Last year, it announced that it would close and reuse a factory in Kingsport, Tennessee, to transform it into a packaging manufacturer.

Converting factories is expensive and takes time. Verso CEO Randy Nebel said in a statement on Monday that the company is “happy to have found a buyer who plans to operate the Duluth plant in the future.” ST Paper executives told the Duluth News Tribune that the new machine It takes 18 months to two years to be fully up and running. 

Verso's sale of its Duluth plant also raised concerns about the future of the company's larger Wisconsin Rapids plant, which closed in July 2020. The closure of the factory laid off approximately 900 workers and eliminated the largest employer in the central Wisconsin city. In November, Verso said it had “suspended” its efforts to sell the Wisconsin Rapids plant.

That factory produces glossy paper for magazines. Fowler said that in addition to being much larger than the Duluth plant, it also uses different pulps, different chemicals and different processes. In turn, it will be more expensive to reuse it, and Verso may hope that the economic recovery will restore demand for its products.

For nearly a year, a cooperative of timber producers has been working hard to buy the factory. Henry Schinebeck, executive director of the Great Lakes Wood Professional Association, said that their negotiations with Verso are ongoing. 

As the supply of sawmills exceeds demand after the shutdown in early 2020, timber prices have soared in recent months. But consumers’ high prices for wood have not translated into increased demand for loggers. That's because there is still no shortage of raw materials.

Schienebeck said that loggers "are now cutting wood, and the wood is piled up like a mountain, because (they) have nowhere to go. ... When this happens, the price of raw materials will drop significantly."

However, at the same time, Fowler said that two long-term trends in the industry may be corrected. Over the years, manufacturers have significantly reduced the production of copy paper and other white consumer paper, and this trend has accelerated in the past year. Today, the prices of these products are rising. At the same time, because many office companies see their printers and copiers idle and many people work at home, manufacturers of various recycled paper products are now seeing a tight supply of recycled paper that they need to recycle. Many producers may soon increase the share of virgin wood pulp used in their products.

"This creates opportunities for pulp and wood producers," Fowler said.

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