A decline in the demand for paper is forcing the Sappi Paper Mill in Cloquet to reduce its production, which will lead to more than 200 people being laid off for about a week.
"Due to global market conditions, Sappi North America's Cloquet paper mill will be taking one week of downtime later in July," the company said, according to the Duluth News Tribune. "The downtime will not have any impact on Sappi's ability to supply coated paper to our customers, as we have ample production flexibility to meet their needs."
The jobs affected will be mainly in the "front end of the mill," where paper is cut and shipped, WDIO says. Maintenance workers will also be affected when the plant idles.
The United Steelworkers 1163 union posted on Facebook, saying about 250 people will be laid off for an eight-day period starting July 21, adding "Although this curtailment is expected to bring us back on our inventory curve, we can’t project for certain what orders will be going forward. Our current order trend is not following historical references."
The Cloquet mill produces dissolving wood pulp primarily used for textile markets, as well as specializing in coated free sheet graphic paper and bleached chemical pulp, the company's website says. The mill has been located on the banks of the St. Louis River since 1898, and currently employs about 780 people.
Sappi is based in South Africa, but has its North American headquarters in Boston. Last year it eliminated 110 salaried and hourly positions within its North American operations (based out of Boston) – 27 of those included vacant positions at the Cloquet mill, the Duluth News Tribune said.
A look at the paper industry
The demand for traditional paper products (think newsprint or coated paper) in the United States and Western Europe has been declining in recent years due to advancements in digital technology, HSBC reported.
Coated free sheet paper shipments (referred to as CFS, which is a product produced at the Cloquet mill) sent from producers out to other companies decreased 10 percent in May compared to May of 2014.
At the same time, overall imports of CFS papers (so, paper not manufactured in the U.S.) increased 28 percent in April of 2015 – that's the 11th year-over-year increase in the last 12 months, the American Forest and Paper Association says.
But the demand for other products made from wood pulp, including packaging materials and textile industries, saw a slight increase in 2014, PaperAge reported. Recent analysis of the global paper industry shows the demand for some paper products is expected to increase in the near future in select markets, reports noted.
The shifting demand in the paper industry has prompted many companies to alter their production focus. Sappi's Cloquet mill began producing wood pulp to be used in the textile industry back in 2013, although it still produces coated free sheet graphic paper and bleached chemical pulp, the company's website says.
The declining demand for paper products in the United States has pushed paper companies to get creative with manufacturing, as well as promoting the need for paper. The Paper and Packaging Board recently launched a campaign to promote the industry, advertising its sustainable practices and manufacturing innovation, among other things.