RUMFORD — The company that owns the Rumford paper mill is seeking Chapter 11 bankruptcy protection while it restructures.
NewPage Corp., based in Ohio, said it expects to continue operating its U.S. businesses as usual and has commitments for $600 million in financing led by J.P. Morgan Chase. In a statement released today, the company said it expects to emerge as a financially stronger company.
The company makes coated paper used in magazines and catalogs and also uncoated and specialty paper. It has been hurt by rising raw materials costs and lower demand. At the end of last year, NewPage reported more than $3 billion in debts, and a net loss of $656 million for 2010 with $3.6 billion in net sales for the year.
The mill in Rumford employs between 900 and 1,000 people, according to Matt Bean, president of Local 900, United Steelworkers, the largest union at the plant.
Union leaders met this morning with company officials and were assured that the company is not seeking to renegotiate its union contract and there were no discussions about layoffs, Bean said.
While the news of the bankruptcy makes him and other workers “uneasy,” he said, he is hopeful that the process will put the company on more solid financial footing.
“We are trying to look at this in a somewhat optimistic manner, and at the same time being cautious,” he said. “It’s gong to be some time before we get through this situation.”
The Rumford mill, which began operation in 1901, is among the largest in the company. The mill produces an average of 640,000 tons of paper and approximately 500,000 tons per year of hardwood, softwood and groundwood pulp, according to the company’s website.
The company also owns paper mills in Ohio, Wisconsin , Michigan, Minnesota, Maryland, Kentucky and Nova Scotia. The company said it hopes to sell its mill in Nova Scotia.
Sen. Olympia Snowe, R-Maine, who in August met with officials at the Rumford mill, said in a statement that the mill has been a cornerstone for the region’s economy for generations and that she stands ready to assist mill workers.
“Across America, jobs like these are the very heart and soul of many of our rural communities and it is critical we do whatever it takes at the federal level to foster an environment of economic certainty that reinvigorates our mills and ensures their lasting competitiveness both domestically and around the globe,” she said.
Staff Writer Tom Bell can be contacted at 791-6369 or at