Luke paper mill is to lose 130 jobs

BUSINESS DIGEST

November 07, 2006|By Hanah Cho | Hanah Cho,Sun reporter

NewPage Corp.'s paper mill, one of Allegany County's largest employers, will lose 130 jobs as part of the Dayton, Ohio-based company's efforts to cut costs and match production with market demand.

The job cuts are the result of the permanent shutdown of the plant's No. 7 paper machine, which the company said last week would end production by March 31.

NewPage said it will offer early retirement to hourly employees who are 62 or older next year, while some might be moved to other positions. Others will be furloughed with the possibility of being recalled, said Amber Garwood, vice president of corporate communications at NewPage.

Garwood said some job cuts will be offset by the creation of 17 positions when a new sheeter machine, which makes sheets from rolls of paper, becomes operational in March.

Two paper machines at the company's mill in Luke will remain along with about 950 employees. The remaining machines will produce 550,000 tons of coated paper annually. The glossy printing paper is used for magazines, books and catalogs.

The No. 7 machine was installed in 1904 and modernized several times. The company said it no longer makes sense to operate a smaller, older machine.

"With the growing influx of low-priced coated free-sheet products from Asia, the smaller line scale and costs of our No. 7 paper machine in Luke have become noncompetitive," said Mark A. Suwyn, chairman and chief executive, said in a statement.

The mill in Luke, population 80, was opened in 1888 by Piedmont Pulp and Paper Co., which later became West Virginia Pulp and Paper Co.

Luke Paper's previous owner, Westvaco Corp., merged with Mead Corp. in 2002. Several hundred jobs cuts followed the merger.

In January last year, MeadWestvaco Corp. sold its papermaking business to a private investment firm in New York. The new company began operating as NewPage Corp. in May last year.

NewPage also announced last week that a paper machine at Rumford Paper Co. in Maine will shut down for three months in the first quarter of next year. The move will affect 50 workers.

NewPage also operates paper manufacturing mills in Escanaba, Mich., and Wickliffe, Ky. The company's four mills have an annual capacity of 2.2 million tons of coated paper.

hanah.cho@baltsun.com

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