Verso idles two mills for indefinite period of time

12 Jun 2020 − 

Drastic times call for drastic measures: Verso will shut down two of its four paper mills until further notice, slashing 40 per cent of its capacities.

In the light of persistently challenging market conditions, US paper manufacturer Verso Corporation has decided to slash its capacity - at least temporarily. The publication paper manufacturer is idling more than 40 per cent of its total capacities for an indefinite period of time. Verso announced plans to shut down its paper mills in Duluth and Wisconsin Rapids until further notice. The Duluth mill is to be idled by the end of June, with the Wisconsin Rapids mill following by the end of July. It is not yet clear whether and when these mills will resume operations. The group said that it was exploring all options, including restarting production if demand improves or permanently closing or selling these locations. The idling measures affect some 1,000 workers.

The Duluth mill in the US state of Minnesota has a capacity of 245,000 tpy of SC paper and packaging paper for bags and sacks. In Wisconsin Rapids, Verso can make up to 490,000 tpy of graphic paper, such as SC paper and book paper, as well as packaging paper for POS applications and laminated cartonboard.

Verso had previously announced plans to scale back production operations. In May, the company said that it was planning to make 100,000-110,000 t less graphic paper in the second quarter to bring supply in line with weak demand. The Covid-19 pandemic had made what was already a difficult situation for graphic paper producers even worse. Verso is not the only one; other paper producers are also complaining of a downturn in demand. Much less advertising had been printed in many sectors such as the tourism, sports and retail segments during the lockdown, Verso pointed out. In May, the company predicted a possible fall of up to 40 per cent in second-quarter sales compared with the first three months of the year.

These steps that the firm has now taken aim to prevent an increase in inventories and improve cash flow. Verso said that it would continue to supply its customers with graphic and speciality papers in roll and sheet form, as well as packaging papers and pulp from other mills not affected by these actions.

Altogether Verso operates four US paper mills making graphic paper, including magazine and book paper, speciality paper like release liner, as well as pulp and packaging paper. The company has set itself a goal of reducing the share of graphic paper that it makes on a company-wide basis. As part of these efforts, Verso had already converted some of its SC paper capacity in Duluth to make packaging paper and can now manufacture both paper grades there.

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