Madison Paper Industries will cease production the week of May 23 and keep workers on for another few weeks after that for maintenance, equipment shutdown and cleaning, mill and union officials said Tuesday.

The mill had announced in March that it would close in May — putting more than 200 employees out of work and adding to the decline of Maine’s paper industry — but previously officials had not cited publicly a specific closure date or timetable for employees.

Russ Drechsel, president and CEO of Madison Paper, said Tuesday that the mill will cease production the week of May 23, though an exact date has not been identified within that week.

Workers will stay on until June 12 and be let go in increments after that, according to Mike Croteau, president of the United Steel Workers Local 36 union, which represents many of the mill employees. He said employees are trying to find new work and some have enrolled in the federal Trade Adjustment Assistance program, which helps workers adversely affected by foreign competition find new jobs or get retrained.

“People are looking for jobs in which they can make a decent wage and benefits and take care of their families. It can be hard to find in central Maine,” Croteau said. Severance packages have been finalized and are “what you’d expect from a company that isn’t bankrupt,” he added. “It’s not terrible, but I have a lot of people that would rather keep working and keep this mill running.”

Mill officials continue to look for perspective buyers for the facility and its hydropower producing assets, Drechsel said. He said he could not comment on whether the company has any leads on buyers.


“We’re still exploring all options, whether it’s somebody who would continue some type of papermaking or not,” he said. “We’re still looking.”

Interest has been expressed in purchasing hydropower and hydropower assets. “I can’t say the same about a lot of people expressing an interest in continuing any papermaking operations at Madison,” Drechsel said. “There have been several but not as great in number as the other two.”

Negotiations with workers are complete and a job fair is scheduled to be held at the mill on Thursday.

“A lot of communications and a lot of meetings are ongoing,” Drechsel said. “You couldn’t ask for more respect from the employees towards each other. It’s just been very good.”

Meanwhile, The New York Times Co. reported Tuesday that it took a $41.4 million hit in the first quarter as a result of the Madison Paper closure. In its latest quarterly earnings statement, the Times explained that the one-time charge resulted from “joint ventures related to the announced closure of a paper mill operated by Madison Paper Industries, in which the company has an investment through a subsidiary.”

Madison Paper Industries is owned jointly by UPM-Kymmene Corp. of Finland and The New York Times Co. Companywide, the newspaper owner reported a total net loss for the quarter of $8.3 million, or 5 cents a share, an improvement over its loss of $14.3 million, or 9 cents a share, a year earlier. It reported quarterly revenue of $379.5 million, down 1.2 percent from $384.2 million in the first quarter of 2015.


The newspaper publisher said its proportionate share of the mill-related loss was $20.1 million after receiving tax benefits resulting from the mill’s operating losses.

The mill also is discussing the possibility of a property revaluation with Madison town officials. The mill’s valuation previously was reduced by nearly $150 million in 2014 and has dropped ever since the announcement of its impending closure, Drechsel said. The market valuation of the mill is based on real estate value, the hydro assets and the papermaking assets.

“The first order is to try and find an interested party who wants to continue manufacturing some type of paper in Madison,” Drechsel said. “If we can do that, that would be the best thing. The second order of business is to find someone interested in generating power and selling it to the grid, and the third thing would be to recover as much (of) the capital that has been sunk into the mill as we can by selling it off in bits and pieces.”

The Madison Board of Assessors is scheduled to discuss on Monday proposals for a new assessment of Madison Paper.

In its March announcement about the mill closing, Madison Paper cited declining demand for supercalendered paper and said the Madison mill “is not cost-competitive.” In the last 16 years, demand for newsprint has declined 15 percent and for glossy paper, 30 to 50 percent.

Although some mills continue to operate profitably, such as Sappi Fine Paper in Skowhegan and Woodland Pulp in Baileyville, the domestic paper industry has been grappling with declining demand and cheaper imports, leading in recent years to mill closures, bankruptcies and layoffs.


Madison Paper is the fifth Maine mill to be shut down in a little over two years, and its closure leaves only six mills operating in the state. Once employing more than 18,000 workers at its height in the 1960s, the state’s papermaking industry has lost more than 1,500 jobs in the past two years and 2,300 since 2011.

The closure of the Madison mill was expected reduce the company’s production by a total of 195,000 tons of paper.

The company previously had said some employees would remain beyond May to maintain buildings, operate a 27-megawatt hydropower generation facility there and support activities related to the closing. The paper business will end, and hydropower assets at the mill site will be sold.

Portland Press Herald staff writer J. Craig Anderson contributed reporting.

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