Citing COVID-19, Verso Corp. idles Wisconsin Rapids and Duluth paper mills

Verso Corporation says it will indefinitely stop production at its paper mills in Wisconsin Rapids and Duluth in order to offset market decline due to the COVID-19 pandemic, laying off more than 1,000 workers.

“The decision to reduce production capacity is driven by the accelerated decline in graphic paper demand resulting from the COVID-19 pandemic,” Verso said in a statement. “The stay-at-home orders have significantly reduced the use of print advertising in various industries, including retail, sports, entertainment and tourism.”

The company stated that North American printing and writing demand fell by 38 percent year-over-year in April.

“It is critical that we maintain a healthy balance sheet and focus on cash flow, while balancing our supply of products and our customers’ demand,” said Adam St. John, Verso’s president and CEO. “We expect the idling of these facilities to improve our free cash flow. The sell through of inventory is expected to offset the cash costs of idling the mills.” 

While the paper mills are idling, Verso said it will explore viable and sustainable alternatives for both mills whether that is restarting if market conditions improve, marketing for sale or closing permanently. Verso expects to idle the Duluth Mill by the end of June and the Wisconsin Rapids Mill by the end of July.

The Wisconsin Paper Council said yesterday that Verso’s decision “is disappointing news for our entire industry.”

“Our trade association is committed to doing all we can to provide support to the thousands of employees and community members who have been adversely impacted by this difficult situation,” WPC said in a statement.

WPC is reaching out to state and local officials to assist in coordinating response efforts.

Wisconsin Economic Development Corp. Secretary and CEO Missy Hughes echoes WPC in that Verso’s closure is a difficult time for those employees, the Wisconsin Rapids region and Wiconsin’s paper product industry.  

“We have already been in touch with the company at WEDC and the governor’s office. We will continue to have conversations with them to see if we will have creative solutions for keeping that plant open for what might come into the future,” Hughes said in a media briefing. 

Hughes noted the $18 billion in economic impact that the paper industry brings to Wisconsin and that the industry employs over 30,000 employees.

“It is critical that we continue to watch this situation and work with the company to do the very best that we can to help them get through this situation,” she said.

-By Stephanie Hoff