Flambeau River mill goes to auction on Sept. 18

With no suitable offers for Flambeau River Papers (FRP) to sell its Park Falls, WI, uncoated freesheet (UFS) paper mill, the facility is to go to auction next week on Sept. 18. The following day, Price County Judge Kevin Klein is expected to approve or deny the sale, according to receiver Rebecca DeMarb.

DeMarb explained that the whole mill is going to auction, not in parts.

“If the auction is not successful, we have a motion to abandon the assets,” she said.

The downturn in the UFS market and rising supply of converted brown paper machines doesn’t present a great environment for a new buyer to try and continue running the Park Falls mill or converting it to other grades, according to contacts.

In the beginning of May, FRP announced that it was seeking a buyer for the paper mill after filing for bankruptcy. At that time, CEO Butch Johnson said selling the mill was the “best option” because of “softening paper markets.”

FRP has capacity of 66,000 tons/yr of UFS on two machines; a third machine, with 85,000 tons/yr of UFS capacity, was idled at the start of 2018.

The Park Falls mill stopped production in June and resumed operations in July, after judge Klein approved an agreement between FRP and CellMark Paper – a major customer and seller of the mill’s paper – for CellMark to continue purchasing paper and wet lap pulp from the mill. It is estimated that CellMark accounts for 80% of the Park Falls mill’s revenue.

The judge also allowed for FRP to receive $2 million in new financing from existing customers DuPont and CellMark.

In a court motion filed last week, receiver DeMarb stated that the market for wet lap collapsed in July, just as the Park Falls mill resumed operations following a 42-day shutdown.

Further, a market contact said that “bi-product liquor derived from the pulp mill to make Xylitol and other products is still important to DuPont, but may not be enough to keep the mill running.”

It was unclear as of Aug. 12 if Park Falls’ paper machine Nos. 1 and 2 were running. One contact said that the mill would take orders, but customers were cautious.

--by rmercante@fastmarkets.com

What to read next
While some paper suppliers begin to see signs of improvement, the markets remain under pressure with uncertainty on when things will get better
As the US loses its export market share to other producing regions, we see softwood lumber imports soar
Fastmarkets’ Derek Mahlburg analyzes the inflationary effect of low operating rates on paper and board mills
(PIX Pulp & Paper Indices) - Following a consultation period, Fastmarkets has made a decision on its proposal to launch PIX containerboard price indices, covering the main grades testliner and fluting, in the Gulf Cooperation Council (GCC) countries on June 6.
Weak containerboard demand continues to impact the Mexican market
Industry leaders said low demand, high inflation and changing consumer spending are to blame as profit margins reach lowest point since 1Q 2012
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.