Over 140 workers being laid off with Woodland mill’s pause in operations

More than 140 workers are being temporarily laid off in an unexpected 26-day shutdown of the Woodland Pulp mill because of low softwood pulp prices. In addition, wood deliveries to the mill are being paused for approximately a 60-day period that began on October 31. The pulp mill usually receives between 120 and 140 truckload-equivalents of wood a day.

According to Scott Beal, spokesman for Woodland Pulp, the shutdown will begin Thursday, November 20, with an orderly process as with a maintenance shutdown. Layoffs of 144 employees will begin Saturday, November 22. The mill will come back online on Thursday, December 17.

The shutdown affects the employees of Woodland Pulp and St. Croix Chipping, while the St. Croix Tissue mill will continue production. Pulp is being produced now in order to have sufficient inventory to continue the tissue mill's operation. All three companies employ between 430 and 440 workers and are Washington County's largest employer.

During the shutdown, workers at the pulp mill and chipping operation will not be paid, but they will be able to draw unemployment, and their health insurance and other benefits will continue. The Maine Department of Labor (MDOL) will provide direct unemployment insurance support to employees affected by the temporary layoff. MDOL staff will be in Baileyville during the week of November 24 to provide assistance to affected employees and connect them with appropriate resources. Due to the short duration of the layoff, employees will be given a waiver exempting them from work search requirements associated with unemployment insurance.

The mill's unions have been informed about the shutdown, with specific details having been released on November 4. While "no one is happy about the situation," Beal says that the management team is being responsive to the unions.

Steve Campbell, president of the machinists' union, one of the four unions affected by the shutdown, says the layoffs will hurt some workers, noting that it's difficult just before Christmas. "It's not the best time of the year to be laid off, especially for those with young children." He does note, though, that some employees have accumulated vacation time during the year, so they may be able to have a week or two of vacation time pay during the shutdown.

As for the reasons for the shutdown, Beal says, "We're in a really challenging global pulp market from a pricing standpoint." Noting that the price for softwood pulp has dropped considerably, he says, "We hope the price will come back." Softwood pulp prices have been dropping because of a number of factors, including high inventory levels, oversupply and weak demand from some markets such as China.

Most of the mill's pulp is sold in North America, but some is shipped to Europe through the port of Eastport. The port is now not expecting any shipments through the rest of this year.

While a new 10% tariff on softwood being imported from New Brunswick that took effect in October may have "an adverse impact on the business' financials," Beal stresses that the price for pulp being sold by the mill is what led to the shutdown. He notes that New Brunswick wood harvesters have historically provided between 25% and 30% of the mill's total fiber needs.

As for rumors that the shutdown could be a prelude to the mill being sold, Beal says he has no knowledge of that being a possibility.

Campbell understands that Woodland Pulp is "trying to move forward with softwood pulp," as it has greater value than hardwood pulp. "That's the goal for the mill." Woodland Pulp has been primarily a hardwood mill for about 40 years. However, it does produce a certain percentage of softwood pulp that is needed by the St. Croix Tissue mill, and the pulp mill increased its softwood production after the tissue mill opened in 2016. Campbell comments, "We are running some softwood now, but we struggle with it."

Campbell notes that there is more softwood than hardwood in Maine, so the supply of wood should not be affected by a change in production.