For much of this decade, the paper industry’s most notable product has been bad news: entire mills closing, others idled for weeks or months, bankruptcies, machines shutting down and workers laid off.

Now, after two decades of cascading drops in papermaking jobs, the basement seems to have been reached. And that, ironically, gives hope to those watching the future of the industry.

“I believe we have a great story,” Rosaire Pelletier, the senior forest products adviser to Gov. Paul LePage, says of the industry. “I see it as stable and growing.”

Recent news supports Pelletier’s take on the state of the industry.

Just last week, ND Paper, a subsidiary of industry giant Nine Dragons Paper, headquartered in Hong Kong, bought the Old Town mill, which has been closed for nearly three years. The announcement came on the heels of ND Paper’s announcement that it would invest $111 million to increase efficiency at its Rumford paper mill. Between the two moves, about 150 new jobs are expected to be created, a shot in the arm for the rural areas that are still dependent on the mills and suppliers for jobs.

The Old Town purchase is expected to boost pulp production in the state, although much of that raw material for making paper is expected to go to ND Paper’s own mill. Eventually, however, some of the pulp could be exported, an increasingly lucrative new market for the state’s forest products industry.



From the post-war years to the late 1980s, the state’s paper industry was fairly stable, with about 18,000 jobs in Maine. Since then, job losses have plummeted from a high of nearly 19,000 jobs in 1967 to just 4,400 papermaking jobs in the state last year, according to the Maine Department of Labor.

Production figures are hard to come by because they are proprietary. But Pelletier said that mills made productivity gains as they were shedding jobs, primarily from automation. He said Maine mills produced about 1.7 million tons of paper a year in the 1960s, which shot up to 3.2 million tons annually in 1980. In 2011, he said, it was about 3.3 million tons a year, but with employment barely a quarter of what it had been in the mid-1980s.

Maine’s industry for decades was built on a bedrock of coated paper production. Glossy coated paper was once king because the long-fiber pulp that could be made from Maine trees was perfect for making the high-quality paper required by magazine and catalog publishers.

But that market has contracted sharply, with magazine circulation plummeting and the catalogs that retailers used to send out replaced with websites where people do their shopping. For instance, magazine retail sales fell from 103 million at the end of 2014 to just 75 million two years later, according to the research firm Statista.

The drop has caused mills in the state to move out of that market and focus on specialty and shipping papers – Verso announced this summer that it was shifting production in its Jay mill to specialty paper and moving out of the coated paper market. The company restructured after a bankruptcy, envisioning a whole new market for its paper.


Others mills have also switched to making labels and shipping materials that are required by companies that now sell online and ship to a customer’s home, and have rebuilt their machines to produce new product lines.

In a court filing in its bankruptcy case, Verso Paper said it expected the market for specialty papers to grow by about 9 percent from 2015 to 2020, while coated paper demand would drop by about 10 percent. That was the reasoning behind its decision, announced in February, to reconfigure a paper machine to specialty paper production and reopen a pulp facility in Jay, bringing back more than 100 jobs.

Retooling a paper mill to make a new product is expensive. Sappi North America rebuilt a coated paper machine at its Skowhegan mill to produce both coated paper and new paperboard packaging products, which will be used for consumer and food packaging applications, at a cost of $165 million. The company kicked off production on the new machine this fall.

Mark Gardner, the president and chief executive officer of Sappi North America, said the company’s investment was necessary because Maine papermakers need to adapt to changing markets.

Maine has “the resources and heritage and is positioned to have a revitalization” in paper production, Gardner said. Sappi North America operates the mill in Skowhegan, another in Westbrook and a third in Minnesota. The U.S. operation is headquartered in Boston and the parent firm is in South Africa.

Gardner said he’s proud of his company’s foresight as shown by its willingness to put money behind projects like the machine rebuild. He said that distinguishes the mills that his company operates and some others in Maine.


“You really have to be looking three to four years ahead,” he said. “That’s what we’ve been doing, and some other companies weren’t as good at doing that.”

‘hiring you for your brain’

The industry’s nadir in the state was probably two to three years ago, said John Wolanski, an executive with GAC Chemical in Searsport and a board member of the University of Maine’s Pulp and Paper Foundation.

Three major mills in the state, in Bucksport, Old Town and Lincoln, closed and a pulp operation in Old Town was also shuttered around that time.

Wolanksi’s company sells chemicals to most of the mills in Maine, so his business felt the impact of those closings. But now, like the mills, he said the company is investing in its operations to meet an increase in demand from the mills, adding more rail track around its Searsport operation for shipping and more machinery to increase production of chemicals inside the facility.

“The outlook and the forecast is very positive and robust” now, he said. “(Maine) mills have reinvented themselves and reinvested in the past couple of years.”


That’s led to a brighter jobs outlook for the industry, Wolanski said.

Students graduating with chemical engineering degrees from the University of Maine are getting job offers from Maine mills, and from mills in Washington state and Oregon, he said.

And despite the precipitous drop in jobs, those who are working in the mills have seen their paychecks grow. According to the Maine Department of Labor, average wages in the paper industry grew from $51,000 in 1999 to nearly $76,000 in 2017.

“People don’t understand that there still are great opportunities in the pulp and paper industries,” said Donna Cassese, a veteran in the industry and managing director, wood resource strategy, with Sappi.

She said jobs are available for those with a high school diploma, but more require a couple of years of community college or a bachelor’s degree.

“We’re not hiring you for your back, we’re hiring you for your brain,” she said.


Like most mature industries, the paper industry has its share of older workers nearing the end of their careers, said Gardner, Sappi North America’s CEO. The company works hard to land talented Maine workers, he said, and the state needs to look at its policies to make sure it’s attracting more people to help fill those jobs.

“Otherwise, our demographics are very scary, like they are in any business,” he said, with many papermakers in their 50s and 60s and nearing retirement.

Cassese said that even with new or rebuilt machines that require fewer workers, the industry is “stable and has fantastic jobs.”


There are also unexplored options for growth in the forest products segment, said Brian McClay, a principal in Brian McClay & Associates in Quebec, which follows the pulp industry.

In Maine, most pulp mills are attached to specific paper mills and almost all of the pulp they produce is used to make paper in those mills.


But McClay said the industry in Maine is missing the boat by not producing pulp for export, a market that’s booming. Demand is rising sharply, particularly in China, where demand for pulp has been rising by 10 percent a year since 2007. It has been the top Maine product exported to China for the last decade.

Prices are going up sharply, too, and have more than doubled from 2002.

Maine is in the unique position of having first-class wood for making pulp and a vast supply in the North Woods, while many other forests are being depleted or hit hard with new pests arriving because of global warming.

Maine has “the highest-quality pulp in the world,” because its softwoods, such as pine, have long, ribbon-like fibers that provide strength and are also very soft, McClay said.

“It’s probably the only place in the world with enough softwood supply to support one first-class pulp mill,” he said, but it lacks that mill, which would probably cost $2 billion to construct.

Woodland Pulp, which supplies pulp to St. Croix Tissue in Baileyville, sometimes has excess pulp that it occasionally ships to Europe and Asia, McClay said, and other pulp mills likewise make an infrequent sale overseas. But, for the most part, Maine “pulp never leaves the mill,” he said.


At a time when the paper industry is struggling to get back on its feet, that makes pulp an overlooked export product for Maine, McClay said.

“The saying is, ‘We can make anything out of paper except money,’ but pulp producers can make a whole lot of money right now,” McClay said. “I’ve rarely been able to say this, but pulp is exciting.”

The problem is finding someone willing to gamble that the international market will support an expensive pulp mill that probably wouldn’t go online until the mid-2020s.

McClay believes the market for pulp will stay strong, with more companies shifting from plastic to paper products – witness the current move against plastic straws to paper-based options. He said demand for pulp in China will continue to grow and there’s not much more capacity in recycled paper products to fill that demand.

That prospect is behind the optimism voiced by Pelletier, the governor’s forest products adviser.

He said that while some mills have shut down, those that were nimble enough to shift to new markets are well-positioned to succeed. For instance, the St. Croix mill in Baileyville, owned by Hong-Kong based International Grand Investment Corp., has boomed by producing tissue paper for the U.S. market, which is protected against foreign competition by shipping costs.


“You don’t want to export a box of tissue to China and China doesn’t want to export a box of tissue to the U.S.,” he said.

But Pelletier acknowledged that many paper producers with mills in Maine have been slow to react to changing markets. When the need to change became apparent, some weren’t in a position where they could invest in converting their machines. That problem wasn’t unique to Maine.

“To convert is very expensive and when they weren’t making money, that’s when you end up in trouble,” he said. “It’s happened in every state that makes paper and in Canada, too.”

But he holds out hope that innovation will come to the industry and Maine will be able to react.

Researchers are looking at ways to extract chemicals from trees that would still allow them to serve their primary commercial purpose of being converted to pulp for paper production, he said.

“There are entire products that we never thought we could have gotten from a tree,” Pelletier said, such as biofuel and textiles, made with extracted materials from trees.


Until those innovations come around, industry veterans like Sappi’s Cassese have a survivalist mentality.

“We’re still alive and providing a lot of jobs and money to the economy of the state of Maine,” said Cassese, who has been in the industry for 41 years. “Those opportunities are still there.”

Edward D. Murphy can be contacted at 791-6465 or at:

This story was updated at 10:45 a.m. on Oct. 15 to clarify the modifications made at Sappi’s mill in Skowhegan.

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