MIAMISBURG, Ohio, April 30, 2019 /PRNewswire/ -- 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.
"It is unfortunate that we had to make the decision to close the
Luke Mill, but the continuing decline in demand for the grades of
paper manufactured there left us no choice but to close this
facility that has struggled with profitability for a number of
years," said Verso Interim Chief Executive Officer Leslie T. Lederer. "The company explored the
possibility of producing alternate grades of paper products but the
conclusion remained the same – we could not achieve profitability
at the mill in today's market environment. Consistently
matching the supply of our graphic paper products with customer
demand for these products, reducing our costs and rapidly
diversifying our product portfolio into growing markets remain
essential drivers for Verso's long-term success, and we continue to
vigorously pursue these objectives."
Most of the Luke Mill's paper grades are already qualified to be
produced on other Verso paper machines, and the company is working
to assure all customer needs are met, according to Verso President
of Graphic and Specialty Papers Michael A.
Weinhold. "Because Verso is continually evaluating the
best use of our highly flexible manufacturing system to assure we
deliver the quality, reliability and value our customers depend on,
our Luke Mill customers can remain confident in Verso's ability to
meet their needs now and in the future," he said. "We will be
working closely with our customers to assure they continue to
receive the high quality products and exceptional service they have
come to expect from Verso."
Approximately 675 employees will be impacted by the closure of
the Luke Mill. Employees were notified in accordance with the
Worker Adjustment and Retraining Notification (WARN) Act that their
last day of employment with Verso is expected to be June 30.
Eligible hourly employees will receive a severance allowance in
accordance with local collective bargaining agreements, and the
company will begin effects bargaining with the local unions
soon. Salaried employees will receive a severance allowance
in accordance with Verso's established severance policy. In
compliance with the WARN Act, Verso sent notification of the
decision to close the mill to the appropriate authorities in
Maryland, West Virginia and Virginia, and will continue to work with state
and local officials to help Luke Mill employees take full advantage
of all available support resources.
"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,"
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. We will also do our utmost to ensure
employee safety during the transition. I want to thank each and
every member of the Luke team for
their hard work and dedicated service to the mill, to Verso and to
our customers."
About Verso
Verso Corporation is the turn-to company
for those looking to successfully navigate the complexities of
paper sourcing and performance. A leading North American producer
of specialty and graphic papers, packaging and pulp, Verso provides
insightful solutions that help drive improved customer efficiency,
productivity, brand awareness and business results. Verso's
long-standing reputation for quality and reliability is directly
tied to our vision to be a company with passion that is respected
and trusted by all. Verso's passion is rooted in ethical business
practices that demand safe workplaces for our employees and
sustainable wood sourcing for our products. This passion, combined
with our flexible manufacturing capabilities and an unmatched
commitment to product performance, delivery and service, make Verso
a preferred choice among commercial printers, paper merchants and
brokers, converters, publishers and other end users. For more
information, visit us online at versoco.com.
Forward-Looking Statements
In this press release, all
statements that are not purely historical facts are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements may be identified by the
words "believe," "expect," "anticipate," "project," "plan,"
"estimate," "intend," "potential" and other similar expressions.
Forward-looking statements are based on currently available
business, economic, financial and other information and reflect
management's current beliefs, expectations and views with respect
to future developments and their potential effects on Verso.
Verso's actual actions and results may differ materially from what
is expressed or implied by these statements due to a variety of
factors, including those risks and uncertainties listed under the
caption "Risk Factors" in Verso's Form 10-K for the fiscal year
ended December 31, 2017 and from time
to time in Verso's other filings with the Securities and Exchange
Commission. Verso assumes no obligation to update any
forward-looking statement made in this press release to reflect
subsequent events or circumstances or actual outcomes.
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SOURCE Verso Corporation