By David Bates • Staff Writer • 

Newberg paper mill closure permanent

News-Register file photo##Newberg paper mill WestRock, previously called SP Newsprint, will close permanently, corporation officials announced.
News-Register file photo##Newberg paper mill WestRock, previously called SP Newsprint, will close permanently, corporation officials announced.

After informing city officials privately Thursday, WestRock brought shareholders up to date Friday morning in an hour-long conference call. And it painted an optimistic picture for the company, mill closures in Oregon and elsewhere notwithstanding.

WestRock is the product of a merger between two of the nation’s leading corrugated paper producers, MeadWesvaco of Richmond, Virginia, and Rock-Tenn of Norcross, Georgia. That makes the $16 billion company the the nation’s second-largest packaging manufacturer.

The Newberg mill began as a lumber operation in the 1800s. It had already undergone a series of ownership changes in recent years before being included in a $288.5 million sale to WestRock last summer.

More than 200 employees, most of them members of the Association of Western Pulp and Paper Workers Local 60, were asked last fall to begin preparing the plant for the shutdown.

The plant had undergone shutdowns before, but had always reopened when market conditions improved. This time, the closure will be permanent, the company announced.

Officials estimate the total negative impact at more than $223 million, based on the loss of 220 mill jobs. They said that takes into account indirect employment and income, including fewer purchases from local suppliers and decreased payroll to support household spending.

All told, it translates to 517 full- or part-time jobs being affected, officials said.

The mill sits mostly on county land, but has historically been the second-largest source of property taxes for the Newberg School District, behind Portland General Electric. Last year, the Yamhill County Assessor’s Office had the value listed at nearly $40 million and the tax obligation at $310,522.

The mill shut down Nov. 15. Citing sagging demand for newsprint and other paper products, the company also closed mills in Coshocton, Ohio, and Uncasville, Connecticut.

But in the conference call, CEO Steve Vorhees touted WestRock’s recent acquisition of Cenevo Packaging, saying it promised to generate “excellent returns.” And while he did not value the shutdown in Newberg, he said the shutdowns in Coshocton and Uncasville promised to reduce the company’s annual operating costs by $25 million.

Vorhees also told shareholders the company was in the process of completing a joint venture with the Mexican producer Grupo Gondi, in which WestRock will be trading its three Mexican mills and $175 million in cash for a 25 percent share in a 13-mill operation. “We’re using our capital to grow and invest in our business and return cash to stockholders,” he said. 

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