<B>Midwest Struggles with Mill Closings</B>

The Midwestern paper industry seems to be in the midst of a major shakeout, with a flurry of mill closings hammering the paper and paper stock industry in the Midwest.

Over the past several months a half dozen mills have announced plans to shutter their doors or have filed for bankruptcy protection.

Georgia-Pacific’s announcement that it is closing its Kalamazoo, Mich., mill is one of the many hits the Michigan and Midwest market has been facing over the past several months.

Along with the G-P announcement, Chicago Paperboard closed its Chicago facility this month.

Fox River announced that it was shuttering its Vicksburg, Mich., mill. Rock-Tenn also announced that it is taking some downtime at its Battle Creek, Mich., mill. While the company says that the closing will be for only a few weeks, there are some who feel the market may dictate the company be closed for an even longer period of time.

Along with these closings, several other paper companies are struggling with bankruptcy problems. Among the companies feeling this pinch include Plainwell Paper and Crown Paper, both with a presence in the Midwest.

While the loss of a significant number of jobs with these closings is significant, the demand for various grades of recovered fiber to feed these mills also is taking its toll. .

Speculation has it that some of the low grades may tumble next month with the sharp reduction in the number of outlets for mixed paper, old news and old corrugated.

The situation could be even more difficult as paper stock dealers in the Midwest are presently struggling with limited market opportunities due to an overall slack paper industry.

One packer in Michigan sees the market for vendors in the area getting worse, with very little indications that markets will be improving in the near future.

Signals about a turnaround in some regions, principally due to the potential improvement in export markets don’t have much of an impact on paper stock dealers in the Midwest.

While the low grade market has been hard hit by the closings, the deinked pulp industry, which soaks up a decent amount of material from the region, also has been struggling with finding homes for their finished product. 

The Blue Water mill in Huron, Mich., has been hampered with declining price and slow demand for its finished product. According to one source the mill is running as it receives orders. This inconsistent pattern is keeping the deinking grade market from strengthening.