Luke Mill Closure Will Shock Western MD Economy

The pending closure of the Luke Mill in Allegany County will cost hundreds of jobs in an already low-growth area of the state.

thumb_AR-150109774The Verso Corporation, a leading North American producer of specialty and graphic papers, packaging and pulp, has decided to shut down the former “Westvaco” paper mill in the Allegany County town of Luke, Maryland. Some 675 jobs at the plant could be lost or affected.

From a Verso press release:

Verso Corporation (NYSE: VRS) today announced it will permanently close its paper mill in Luke, Maryland, in response to the continuing decline in customer demand for the grades of coated freesheet paper produced at the mill, along with rising input costs, a significant influx of imports, and rising compliance costs and infrastructure challenges associated with recent environmental regulation changes. The closure, which is expected to be complete by June 30, will reduce Verso’s coated freesheet production capacity by approximately 450,000 tons, reducing total annual paper production capacity to approximately 2.7 million tons.

From coverage in the nearby WVMetroNews website:

“The decision to close this mill that has been in operation for more than 130 years was an extremely difficult one, and is in no way a reflection on the dedicated men and women who work there,” [Interim Chief Executive Officer Leslie T. ] Lederer said. “We know that this will be an extraordinarily emotional and challenging time for our Luke Mill team, and Verso is committed to treating them with fairness, respect and dignity during this difficult time.

Baltimore Sun coverage notes the relevance of the plant to recent “clean energy” debates in Maryland:

The mill was the subject of a 2017 Baltimore Sun series because it has received millions of dollars of subsidies from Maryland electricity ratepayers for generating energy by burning a substance known as black liquor. The paper-making byproduct is considered a renewable fuel under a Maryland program established in 2004 to promote use of green energy.

That made the facility controversial among environmentalists. But a series of mill owners nonetheless repeatedly fought off efforts in the Maryland General Assembly to take the subsidies away.

Read the 2017 Sun series on the Luke Mill and clean energy credits.

Michael Sanderson

Executive Director Maryland Association of Counties