Paper mills slowing, shutting amid pandemic disruption

DULUTH – First the mines, now the mills.

Layoffs and closures are hitting northern Minnesota paper producers as the COVID-19 pandemic disrupts the global economy.

At the Sappi mill in Cloquet, rotating layoffs have begun "to balance our product supply with demand."

"The temporary layoffs will be on a rotational basis, affecting employees for between one and two weeks at a time," said Olga Karagiannis, spokeswoman for Sappi North America.

The mill employs about 750 people and is Cloquet's largest employer.

Sappi's senior leadership agreed to pay cuts during the pandemic, and laid-off workers will still have health insurance coverage.

"The company's focus remains on the health and safety of its staff and supporting its customers, suppliers and communities as the pandemic and the actions to curb its spread continue to have significant negative trading and socio-economic impacts," the South Africa-based company said.

"The global response to the coronavirus pandemic has led to an overall slowdown of the economy," general manager Scott Juidici said in a statement. "We are taking short-term measures to respond to market conditions. We rely on our global network of modern paper mills to meet customer demand."

A union official said there should be a return to normal operations in several weeks.

Industry advocate Mike Birkeland cautioned that these closures and slowdowns are unlike normal highs and lows the industry normally experiences.

"The issues related to this have never been seen before," said Birkeland, executive vice president of Minnesota Forest Industries and Minnesota Timber Producers Association. "The mills are watching their costs right now very closely."

Slowing production also has a "ripple effect" that is reaching loggers.

Some mills are continuing operations uninterrupted for now.

Packaging Corp. of America said its Boise Paper mill in International Falls — Koochiching County's largest employer with about 580 workers — will continue to operate as normal. Operations at the company's Jackson, Ala., mill will be idled in May and June to lower production to match lower demand.

At Duluth's Verso mill, which employs about 240 people, business is continuing.

"Verso continues to operate the Duluth Mill in order to serve in our role as a critical infrastructure manufacturer and to meet the ongoing needs of our customers, including those in other critical infrastructure sectors," said company spokeswoman Shawn Hall.

Verso is seeking state support for a $34.5 million upgrade at the Duluth mill. Without the investment, the mill is "a likely candidate for permanent closure," according to city documents.

Three mines have temporarily shut down — Hibtac, Keetac and Northshore Mining — costing 1,500 high-paying jobs on the Iron Range.