The Verso paper mill in Jay could be in line for additional investment as the company considers all options for increasing value.

In a conference call Wednesday to review its second-quarter performance, managers of Verso Paper said they have hired a consultant to look at each of the company’s seven mills and the company as a whole to determine how to wring the best value for shareholders.

“We’re evaluating everything,” CEO Chris DiSantis said in the call. “We look at every single mill and we look at what’s the opportunity for conversion of that mill if we make considerable investment there … also we’ll look at whether that mill has more value as a joint venture, or more value if that mill if it is sold, or if we try to ambitiously fill that mill with new product and upgrade the mix. You look at holistically, which is how do we maximize the value of the whole system?”

DiSantis was responding to a question about Verso’s hire of Houlihan Lokey, a global investment bank that is the top mergers and acquisitions adviser in the country, according to Thomson Reuters.

But the managers also singled out its Androscoggin Mill as an example of how converting to a new product line and reducing excess capacity positions the company for increased revenue. Last fall, the mill’s No. 3 paper machine was idled, resulting in the layoffs of about 200 people, and its No. 5 machine was refitted to produce specialty paper – a departure from the coated paper the mill has historically produced. The No. 3 machine was shut down earlier this summer, but many of those laid off were able to find new jobs or training.


The No. 5 machine is now at 78 percent capacity and growing, according to the second-quarter report. Once it achieves full capacity, it could contribute $10 million in revenue.

“Androscoggin Mill is being evaluated for additional capital investment for expanded product line offerings and to enhance cogeneration capabilities,” DiSantis said.

In the accompanying report, the company noted that there is a “robust product development pipeline” for the No. 5 machine, perhaps expanding into release liner paper and other products.

In an email received Thursday, Kathi Rowzie, vice president of communications and public affairs at Verso, said the company didn’t have any further details to share at this time.

Rowzie did not respond to a request to speak with the mill manager regarding what the investment could mean locally.

Jay Town Manager Shiloh LaFreniere was unavailable for comment Thursday afternoon.


Specialty products now account for 23 percent of Verso’s year-to-date revenue. When pressed by an analyst, DiSantis said specialty-grade papers sell roughly at about $300 per ton more than graphics or publishing papers.

The emphasis on new products comes as the paper company is trying to reposition itself after emerging from bankruptcy last year, a process that shed $2.4 billion of debt. It is still carrying $322 million in debt and has adopted an aggressive strategy to maximize profits.

DiSantis acknowledged the company just concluded a “challenging” quarter. Net sales through June 30 were $1.2 billion, down from $1.32 billion last year – a reduction in part attributable to the loss of products from the idled Androscoggin paper machine. Net income for the first six months of the year was a loss of $70 million, better than 2016’s loss of $121 million at this point in the calendar, but still a loss.

DiSantis said the disappointing numbers reflect three problem areas: depressed prices, increasing materials costs such as natural gas and chemicals, and downtime.

“Mills are economic machines built to run wide open,” DiSantis said. “Downtime is a real impediment to making any kind of profit.”

To address input costs, DiSantis warned that any suppliers or service providers who are not willing to work with Verso on lowering prices or extending payment terms “are being phased out.”

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