Verso Corp. Announces Permanent Closure of Maryland Paper Mill
Verso Corporation- the leading North American producer of coated papers announced its decision to permanently close its Luke, Maryland paper mill. The proposed closure is expected to be completed by June 30 this year. The decision will lead to reduction of coated freesheet production capacity by 450,000 tons, thereby reducing the annual paper production capacity to nearly 2.7 million tons.
Verso cited several reasons for the closure of the mill. Escalating input costs and continuous decline in demand for the coated freesheet paper produced at the mill are some of them. The company also cited uncontrolled imports, rising compliance costs and mandatory investments on account of changes in environmental regulations as other key factors that might have led to the decision.
According to company press release, approximately 675 employees are likely to be impacted by the closure. All the employees have been notified in accordance with the Worker Adjustment and Retraining Notification (WARN) Act that June 30 will their last day of employment with the company. The notification of the decision has already been forwarded to appropriate authorities. Eligible hourly employees and salaried employees will be paid severance allowance in accordance with local agreement and Verso’s established policy respectively.
Verso Interim Chief Executive Officer Leslie T. Lederer said the decision to close the mill was an extremely difficult one. The dull prospects for achieving profitability under current market conditions forced the company to dismiss the possibility of producing alternate grades of paper products, he noted.