Waste paper plant to close

Locust Point mill to shut down in April

Recycling industry

March 02, 2000|By Kristine Henry | Kristine Henry,SUN STAFF

The new owner of Chesapeake Paperboard Inc. said yesterday that it will close the Locust Point mill in the spring, throwing 100 people out of work.

The Fort Avenue mill, which recycles waste paper into cardboard, will close April 17. Seventy-five of the employees are hourly workers, and the other 25 are salaried.

"The facility was operating at a loss for the last couple of years, and the company made the decision -- because of the weakness in demand for the product, to shut it down and transfer production to other company facilities," said H. Lee Thrash III, chief financial officer of Chesapeake's parent company, Caraustar Industries Inc. in Atlanta.

Chesapeake Paperboard, founded in 1910, was foundering even before Caraustar acquired it in 1998.

In May 1994, the company told workers that the facility might have to shut down, though officials did not elaborate on its financial condition. Two months later, Chesapeake said it would remain open.

"When we bought it, it was operating at a loss," Thrash said. "We had believed we could turn that around, but we have been unsuccessful at doing so."

He said the mill has been operating at 50 percent capacity, while Caraustar's 16 other mills operate at 90 percent capacity.

Caraustar made $41 million last year on sales of $890 million.

"We just have to accept it; they tried desperately to stay in business," said Roosevelt Jordan Sr., international representative for the Paper, Allied-Industrial, Chemical and Energy Workers (PACE) International Union Local 20652. "They were honest with us from the beginning. When they purchased it -- they said if they could not make it profitable, they would have no choice but to shut it down."

Jordan said union workers earned between $8 and $15 an hour, depending on how long they had been with the company.

"They are good employees, skillful, very conscientious," he said. "I think they will find jobs elsewhere."

Caraustar said the mill's fiber-processing plant, which compresses waste paper into bales for sale, will remain open. It employs 15 people.

Its carton plant in Hunt Valley, which has more than 200 workers, will also remain open. However, that location will have no job openings for the displaced Baltimore workers, Thrash said.

Lois Mark, senior development officer for Baltimore Development Corp., said the shutdown came as a surprise.

"Our understanding is that they purchased new equipment for the plant not long ago, so we didn't expect that they would be closing," she said.

The company did not seek or receive incentives from the city when it purchased the mill in 1998, she said. It received work force training grants from the state, she said, but the dollar amount was unknown.

Officials at the state Department of Business and Economic Development could not be reached for comment yesterday.

Mark said that when the closing was announced, the city's Office of Employment Development sent a "rapid response team" to the plant to help with job placement and counseling. "We are hopeful the people losing jobs will be able to find new ones," she said.

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