FutureMark Chicago area paper mill closes

FutureMark Alsip, located in Alsip, Illinois, has closed indefinitely. The company had announced the facility would remain open until early September, though a source says the mill closed its doors by late August.

The company cited challenging market conditions in the North American coated paper market as the key reason for shuttering the mill. In announcing the closure plans, FutureMark says Alsip was the only facility in North America making coated publication and printing papers predominantly from recycled materials. FutureMark says its recycled-content printing and writing paper mill in Manistique, Michigan, will continue to operate.

“This is an extremely difficult decision for us given the exceptional achievements of the Alsip mill in producing coated papers with unmatched levels of recycled content and the dedicated work of all of our employees,” says Stephen Silver, CEO of Alsip. “We explored many options to avoid this action, but the brutal reality for all coated paper manufacturers today is that falling demand and pricing pressure from lower-quality uncoated substitutes has driven prices to near historic lows. Combined with massive increases in energy costs over the winter, this pricing pressure has made it impossible for us to continue our Alsip operations at this time.”

The company says prices for coated mechanical paper continue to decline. At the same time, energy costs remain high. Adding to the overall challenges, the Canadian government’s estimated $200 million subsidy of the previously bankrupt Port Hawkesbury paper mill in Nova Scotia in 2012 enabled that mill to reopen, adding 40,000 tons per month of low-cost super-calendered paper to the market, creating an overcapacity that has many U.S. coated players operating at a loss.

FutureMark says it will fulfill orders and support customer efforts to transition to new suppliers. After filling customer orders, a closure team will remain on site for a time to shut down the machine, maintain the facility and infrastructure and support customers in the smooth transition of products and services.

The company says it has explored all alternatives for avoiding the shutdown, including expanded debt facilities, locating new investments and the possible sale of the company. FutureMark also received cooperation from its union and salaried employees in the form of wage concessions. However, some recent operational issues on top of continued poor market conditions led to a severe liquidity crisis, the company says, 

“We appreciate the tireless efforts of all of our Alsip employees and the warm support the community and local government has extended to us throughout our many years of operation in this region,” Silver adds. “We deeply regret the impact this will have on all involved. We fought as long and hard as we could.”

The company is working with an investment bank with a background in the paper industry to assist in evaluating alternatives for maximizing the value of Alsip in a sale—including converting the facility to a standalone deink pulp mill for the sale of recycled fiber; using the site to manufacture tissue, converting the mill for the manufacture of packaging papers or continuing its current line of coated papers. The company says it is actively engaged in a number of conversations with interested parties to explore these options with the ultimate goal of finding the best value for this facility for the creditors and recalling the workforce as soon as possible. As of late August, the company says it had received expressions of interest from several potential buyers.