Damaged Sartell Mill to be Shut Down Permanently
Verso Paper Corporation, which owns the Sartell paper mill that was damaged in a May 28 explosion and fire, will not reopen the mill.
Memphis, Tennessee-based Verso announced its decision Thursday, citing market challenges and the time it would take to repair the mill as reasons to shutter it permanently. The company had announced earlier that the mill would take “several months” to repair.
Verso President and CEO David Peterson said in a statement that the Sartell mill “has not been competitive for a number of years, and our assessment indicates that it is impossible for the mill to achieve a competitive position in today’s marketplace, especially after a setback of this magnitude and duration.”
“We will work closely with local and state officials to develop options for the future use of the mill site,” he added.
One person was killed and five were injured in the Memorial Day explosion at the mill in downtown Sartell, which has been closed since the tragedy occured. The explosion resulted in a large fire inside the mill, which damaged the mill’s paper warehouse and some electrical systems. The fire also destroyed more than 5,000 tons of finished paper and some unfinished inventory—which together are reportedly valued at about $5 million.
Verso employed 259 at the Sartell mill and was the second-largest employer in the city of about 16,000. The company had given layoff notices to most of the plant workers by late June.
According to an Associated Press (AP) report, plant manager Matt Archambeau said that company officials did not ask for help from the state because they knew the repairs to the plant would run into the “tens of millions of dollars.”
Verso said that the mill closure will reduce its capacity to produce coated, groundwood paper by 180,000 tons annually—or approximately 20 percent. The closure will also eliminate approximately 35,000 tons of supercalendered paper—a type of smooth, thin paper—from its annual production.
The company also expects the closure to result in an aggregate pre-tax charge to earnings of approximately $114 million in the third quarter of 2012, including approximately $19 million for severance and benefit costs.
Meanwhile, Governor Mark Dayton traveled to Sartell on Friday to meet with local officials and offer the community his support, according to the AP. Dayton spokeswoman Katharine Tinucci reportedly said that the governor will do everything he can to recruit a company to buy the mill or find an investor for the site.