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Verso to Close Bucksport, Maine, Paper Mill

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Verso Paper Corp., Memphis, Tenn., USA, this week announced plans to close its paper mill in Bucksport, Maine. The closure of the mill is expected to occur in the fourth quarter of 2014. The mill closure will reduce Verso's coated groundwood paper production capacity by approximately 350,000 tons and its specialty paper production capacity by approximately 55,000 tons.
"The Bucksport mill unfortunately has not been profitable for a number of years, in spite of our employees' dedicated efforts to make it so. Our assessment indicates that it is impossible for the mill to achieve profitability in today's marketplace," said Verso President and CEO Dave Paterson.
"This decision is especially difficult because of the significant impact that the closure of the Bucksport mill will have on many people across the region, especially our long-serving and hard-working employees and their families," said Verso SVP of Manufacturing and Energy Lyle Fellows. 
Verso said that it is committed to helping the Bucksport mill employees who will be affected by the closure. It will work closely with union officials and salaried employees concerning severance benefits and other assistance. The company also will work with local and state officials to help affected employees access resources to identify alternative employment opportunities.
Verso added that it will work with its customers to find the best long-term solutions for their product needs after the closure of the Bucksport mill. "Our desire in this process is to minimize disruption to our customers' businesses to the extent possible. Even in the face of reduced production capacity, our customers know that they can depend on Verso to deliver high-quality paper products and exceptional customer service," said Verso SVP of Sales, Marketing, and Product Development Mike Weinhold.
Verso estimates that the closure of the Bucksport mill will result in pre-tax cash severance and other shutdown charges of approximately $35-$45 million to be recorded in 2014 and 2015. The estimated cash charges consist of approximately $30-$35 million in severance costs and approximately $5-$10 million in other shutdown costs. Verso currently is analyzing options for the disposition of mill assets and thus does not have sufficient information to estimate the pre-tax noncash asset impairment and accelerated depreciation charges at this time. Verso expects that the noncash charges will be recognized in 2014. 
"The Bucksport mill has a long and proud history. We thank all of our employees, the surrounding communities, and the many local and state officials who have partnered with us over the years," said Bucksport Mill Manager Dennis Castonguay. "It's difficult to put into words how much your support has meant to us."

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