fedgazette

Steel, lumber, paper?

Minnesota State Roundup

Published January 1, 2003  |  January 2003 issue

Roughly parallel to the plight of the taconite and wood products industries in northern Minnesota, paper makers are facing tougher markets for a number of reasons, including cheaper imports, according to a recent study.

The study released by the union that represents paper workers in Cloquet and Brainerd predicted that industry cutbacks could mean a loss to the communities of more than $40 million over the next two years.

The Brainerd mill closed recently, with over 600 people losing their jobs, and the Cloquet mill cut its workforce by 280. The Cloquet mill's new owner, Sappi Ltd., has pledged $500 million in investment there, but Sappi also made closing the Brainerd mill a condition of its purchase from Potlach Corp. Mills in both towns specialized in production of coated free-sheet paper used largely in magazines and catalogues.

Industry consolidation and cutbacks aren't new. Since 1999 North American producers of coated paper have reduced their manufacturing capacity by 21 percent, according to industry sources. Factor in the recent recession, resulting in decreased advertising space in magazines, and reduced demand credited to the increased use of the Internet and the industry picture grows dimmer.

Kathy Cobb

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