FutureMark Alsip, a company that makes coated publication and printing papers from recycled materials, will indefinitely place its mill in idle mode due to challenging market conditions in the North American coated paper market.
The decision will impact close to 170 employees who are working at the mill.
Alsip CEO Stephen L Silver said that falling demand was the primary reason for the decision.
"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.
"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 mill will remain open for about two weeks to fulfill orders, after which a closure team will assist in shutting down the machines, maintaining facility and infrastructure, and supporting customers in the smooth transition of products and services.
The company said that it explored all alternatives for avoiding the shutdown, including expanded debt facilities, attempts to get new investment and a possible sale of the company. It also received cooperation from its union and employees in the form of wage concessions. However, recent operational issues coupled with poor market conditions led to a severe liquidity crisis.
The company is currently working with an investment bank which has worked in the paper industry to assist in evaluating alternatives for maximizing the value of the company in a sale.
