More cuts are in store for the Capital Region’s paper industry, with a New Jersey company planning to close a 154-year-old paper mill in northern Rensselaer County.
The Newark Group last week announced it will close two Northeast mills — including Bennington Paperboard in North Hoosick. The Cranford, N.J.-based recycled paperboard company Thursday notified the New York Department of Labor that the North Hoosick mill will close Aug. 30, resulting in the elimination of 64 jobs.
In a U.S. Securities and Exchange Commission filing, the company said overcapacity concerns are prompting the closures, which will boost its earnings by $10 million annually.
The closure of Bennington Paperboard will come a decade after the Rensselaer County Industrial Development Agency awarded the Newark Group $750,000 for new equipment and product expansion initiatives. The funding from the New York Environmental Investment Program was intended to dissuade the New Jersey company from closing the North Hoosick mill, which it acquired in 1995.
Bennington Paperboard has been manufacturing paper products since 1854. After the completion of its $1.8 million capital project in 2000, Bennington Paper was producing over 30,000 tons annually of 100 percent recycled boxboard. The mill had expected to boost annually production by 2,400 tons each year but that figure ended up being 5,520 tons, according to the state Economic Development Corp.
In announcing the closures of mills in North Hoosick and Haverhill, Mass., last week, the Newark Group attributed those moves to a “further rationalization of capacity within the company’s paperboard mill division.” The company expects to incur $4 million in costs related to the closings of the two mills. The Newark Group has 43 North American facilities and nine in Europe.
For the first nine months of its fiscal year, the Newark Group posted a net loss of $9.6 million, compared with a net loss of $157,000 for the same period a year earlier. Although sales during the period ending Jan. 31 were up 13 percent at $770 million, higher energy costs, commodity prices and transportation expenses dug into the Newark Group’s profits. In a May presentation for bondholders, the company noted an “imbalance between supply and demand” for uncoated recycled boxboard.
Albany International Corp. in Menands is another company struggling amid the North American paper industry slowdown.
Last summer, the paper machine cloth manufacturer announced plans to close two Capital Region operations because of the shrinking ranks of North American paper mills and heightened competition. The shutdown of an East Greenbush press fabrics plant and Menands dryer fabrics operation resulted in the elimination of 225 jobs.
Mills use Albany International’s paper machine fabrics to make paper and paperboard. It is not clear whether the closure of Bennington Paperboard will affect the Menands manufacturer. Albany International spokeswoman Susan Siegel did not immediately return a call seeking comment.
Bennington Paperboard plant manager Gary Lancour and Newark Group Vice President of Human Resources Carl Crook did not immediately return calls seeking comment. Rensselaer County IDA Director Robert Pasinella could not be reached for comment.
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