Manistique Papers to Close Doors
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Manistique Papers Inc. (MPI), Manistique, Mich., USA, this past week announced that it was shutting down operations, filing for bankruptcy, and seeking a buyer. Citing a financial impasse with its lender, MPI, operating for 90 years in Manistique, said it could no longer continue its struggle with declining demand and increasing material costs, according to a report by the local Daily Press newspaper. MPI employs some 150 people and produces specialty offset papers from 100% recycled fiber.
According to a press release issued by MPI, necessary funding needed to continue operations was denied last week, despite the paper company's good financial history, stock holder guaranty payments, and support collateral value.
"In light of the lender's decision, we examined our few options with legal counsel and we regret having to make the decision to file bankruptcy," MPI director and GM Jon Johnson explained in the release. "The business circumstances leading to this decision were unforeseen - we are as shocked by this as everyone else. We had thought and hoped that the lender would allow us to continue operations while we searched for alternative financing."
A volatile market also played a role in the company's decision to close its doors. "While our values and service have not changed since 1920, the American economy has changed," said Johnson. "Due to the current economic situation and the inability to obtain our working capital needs, we are left with no choice at this time but to close this chapter of Manistique and Michigan history."
According to the release, the mill's raw material costs have increased $1 million per month since this January, severely impacting its bottom line. Market conditions also resulted in a significant decrease in demand, creating excess inventory and falling revenues.
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