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February
23, 2011
PRESS
RELEASE - Blue Heron Paper Co.
Today,
Blue Heron Paper Company regrettably announces that it is
permanently curtailing operations at its Oregon City specialty
paper mill and issuing WARN notices to its employees related
to permanent closure of the facility. On December 31, 2009,
Blue Heron filed for bankruptcy protection and has been operating
for the last 14 months under the Chapter 11 protective umbrella
as it has refined its reorganization plan and tried to emerge.
Immediately after filing, the Company went through a downsizing
in which it cut about 3,000 tons per month of newsprint production,
reduced headcount, increased worker flexibility with the support
of its union employees, and began a focused effort to grow
a new product line of environmentally friendly commercial
toweling grades. "The initial plan was successful in
restoring profitability and the Company received meaningful
support from its suppliers and other creditors", said
Company president Mike Siebers, "but lately those profits
began to erode due to escalating waste paper prices and limited
availability of that raw material. "All the paper products
we manufacture use a high percentage of recycled fiber in
them", said Siebers. "Mills like Blue Heron are
where the actual recycling of the collected waste paper you
set out at the curb takes place. But China and other far-East
countries have developed an insatiable appetite for recycled
fiber to support their own paper plants which are then subsidized
by their parent countries in other ways to maintain their
jobs. This allows them to drive up the price for waste paper
to unsustainable high levels for periods of time, giving them
an unfair advantage over companies like ours," said Siebers.
Concurrent
with refining its reorganization plan, Blue Heron lately also
actively sought an investment partner or buyer who could provide
additional capital standing to secure trade credit and strategic
or operating synergies with the Company. So far we have been
unable to identify an investor willing to proceed at an appropriate
value.
"Unfortunately
things have come to a quick head due to an unforeseeable and
dramatic increase in waste paper cost in February," said
Siebers. "In this month alone, our delivered cost for
recycled paper has increased by $24 per ton adding around
$240,000 to our monthly cost of production and basically wiping
out any potential for profit in the near-term future. Our
waste paper suppliers have told us to either meet the market
price or they will not deliver. This has left the Company
with no other choice other than to curtail operations and
announce the closure. The Oregon City mill is expected to
only operate for a few more days as it runs out its supplies.
Beyond that," said Mr. Siebers, "it is unclear if
the operation will ever be re-started."
Blue
Heron is a 100% employee-owned Company that has been in business
since 2000. Currently, they employ about 175 union and non-union
workers. "I feel sorry for both our employees and customers,"
said Siebers. "The Company has worked hard to produce
new and unique recycled fiber products that support customers'
demands for environmental attributes. I would like to thank
our employees for their dedication to the job, the suppliers
who have stayed with us through this entire process, and our
customers for their support of our products." "Unfortunately,
these high-paying green jobs are now going to be exported
to China along with the recyclable waste paper that is shipped
there." There has been paper produced at the Oregon City
mill site at the falls for over 100 years.
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