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Northern Wisconsin Paper Mill Seeks Buyer Amid Financial Struggles

Flambeau River Papers Seeks Bankruptcy Alternative, Plans Layoffs

Stack emissions at Flambeau Paper Company
The paper mill operated near the Flambeau River in Park Falls since 1896. Now, the site is the home of a crypto-mining operation. Wisconsin Department of Natural Resources (CC BY-ND)

A paper mill in northern Wisconsin has announced it’s seeking an alternative to bankruptcy in the face of declining demand for its product and increasing pulp prices.

Flambeau River Papers in Park Falls said a trustee will be appointed through the courts under Wisconsin law to oversee its operations amid financial struggles.

The paper mill has operated under several different owners since it opened in 1896 and nearly shut down for good 13 years ago when SMART Papers of Hamilton, Ohio, filed for bankruptcy. Flambeau River Papers bought the mill in 2006 for around $19 million with the help of a $4 million loan from the state, according to media reports at the time.

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Bill Johnson, the company’s director of government affairs and public relations, said they’re now looking for a buyer and scaling back operations.

“Our goal is to work through this, play the market conditions that come to us,” said Johnson. “But right now, our plan is to eventually have a layoff and eventually move the mill to a one-machine mill.”

Flambeau River Papers employs around 200 workers. The mill has three paper machines and the company already shut down one machine in January of last year. Johnson said they expect to take another machine offline and move toward becoming a specialty niche paper maker.

The paper mill is a small producer of uncoated free sheet paper that is often used in the production of office paper. The American Forest & Paper Association reported U.S. shipments of uncoated free sheet paper dropped 10 percent in March from the same month one year ago. At the same time, imports increased 33 percent this February from February of last year.

“We’re never going to compete with writing papers and envelopes and things of this nature,” said Johnson. “It’s really going out (and) finding these smaller markets that have improved margins that can withstand some of the interruptions that we’ve witnessed.”

Johnson said they might lay off employees in the next 60 days unless market conditions change. He declined to say how many workers may be affected.

Michael Bablick, recently elected mayor of Park Falls, said the mill has been the center of economic activity in the city of roughly 2,500 for more than a century.

“This really does have a significant impact to the community from everything from housing, discretionary income that’s in the community and definitely in morale,” said Bablick.

The paper mill, health care providers and the school district are among the city’s major employers. Bablick said generations of his family have worked at the mill.

“We’d be open to conversations that made sense to the city in keeping this job base and keeping this economic base,” he said.

Park Falls’ mayor said the mill is a large customer with the city’s water utility. He fears the company’s decision to scale back operations will lead to a loss of revenue for the city that might hurt ratepayers.

Johnson said the goal is to keep the mill in operation.

“Obviously, we wish this wasn’t happening. We wish we could’ve played the market and market conditions a little bit better,” he said. “But every employee that we’ve had in that mill, every vendor, everybody – we’ve put our heart and soul into this mill.”

A paper mill in Green Bay went into receivership in 2017, shutting down and laying off around 600 workers. The mill is now operated by Midwest Paper Group. The company hired back half its workforce, according to the Appleton Post-Crescent.