COMBINED LOCKS - Appleton Coated,a 129-year-old paper mill all but given up for dead last October,has now been given a new nameas it gets back up to speed.
It's now called Midwest Paper Group.
And while the mill still makeswriting and printing papers, its warehouse is now filled withbrown paper ready to ship and becomethefluted part of corrugated cardboard.
The company had been shut down in September as it went through receivership proceedings. It's been coming back to life in phases since December when its improbable newowners decided to restart the mill rather than scrap it.
It's owned bytwo used machine dealersthat bought Appleton Coatedout of receivership in October for about $21 million. Industrial Assets Corp. in Los Angeleswas the visible entity at court hearings last fall. Co-owner Maynards Industries USA out of Detroitispart of a Canadian firm.
Instead of scrapping and selling the mill, they put an additional investment of "eight figures," or upwards of $10 million, to fund the operation and make equipmentimprovements, said John Corrigall, the company's head of people, legal and environmental affairs.
"They lookedat what they had purchased and saw the value of those assets. Theywere intrigued enough to look at the strategy we developed to move into new product categories," said John Mazuroski, head of sales and marketing, who was part of the prior ownership group atAppleton Coated.
"This would not have happened without the employees coming back," Mazuroski said."We couldn't havestartedover with new employees."
"This is the classic David v. Goliath story. Workers are David and Goliath is PNC Bank and the personification of the bad receivership law," said Outagamie County executive Tom Nelson. "And it may be the biggest grassroots, economic success story in the last decade. We avenged the ghost of Kimberly's NewPage past that had been hanging over our county for a decade."
Nelson had objected to Appleton Coated's sale under receivership in September, figuring it meant the mill would close. Hesays the mill's rebirthis a testament to the workers who took a chance, their families and the community.
"They beat the odds."
A look inside
Corrigall and Mazuroskigave a tour of the millWednesday morning to show its signs of rebirth, including employees using towmotors to load four-ton rolls of brown paper onto rail cars atan expanding indoor rail siding area.
Prior to the shutdown, less than 1 percent of the company's products were shipped by rail. Since the restart, about 25 percent is shipped via rail.
The mill's massive No. 7 machine,restarted last month, is again churning out uncoated offset, a paperused in advertising, fliers and direct mail. TheNo. 6 machine isin the process of changing grades from white to brown paper. Its No. 1 machine hasbeen converted to make paperboard for packaging.
The mill has an annual production capacity of 400,000 tons on itsthreemachines. The new owners are in theprocess of adding a waste paper pulping machine.An adjacent coating and finishing complex, which is not yet up and running, has the processing capacity of 280,000 tons.
Employee voices
Angie Slinger, transportation and shipping supervisor,was one of about 40 employees who stayed on after the shutdown to help with shipping and maintenance.Her area was nearly emptied as paperrolls were shipped or pulped.
"You could have played a game of football in here," she said.
Now, the area is full of massive rolls of paperagain, waiting to be shipped to customers.
"A lot of us never thought we'd see this day," she said.
The mill's current 245 employee count is a far cry from its previous 600, but those employees appear to be feeling vindicated.
All but oneare returning employees who took a gamble when they said they'd come back to the mill.
"My son said, 'Dad, get out of the paper industry,'" said Jerry Meulemans, machine tender forNo. 6 machinewho's known as Grizz because of hisgrizzly bear demeanor.
"I told him, 'I'm hanging on to the melting ice cube,'" he said. "Today, I'm not worried about it. I'm not worried about next month or next year. We'll make it happen. I don't think there's another paper mill that had a second chance. I want my grandchildren to work here."
Shawn Knudsen started at the mill when he was 18 and has logged 33 years. When the shutdown came, "Nobody knew where to start on job hunting."
He took a job elsewhere for $8 an hour less but left after two months when he got the Appleton Coated recall.
"I wanted to cry, to be honest. It's like a family here," Knudsen said.
"I had faith in the company," said Nick Reetz, a stock prep controller who returned in December.
Of the 245 employees, 200 are hourly workers governed by a two-year United Steelworkers union contract ratified April 1. Those who came back prior to ratification had taken a big risk.
"That was a risk that a lot of people had to weigh. They had to sit down with their families and make these decisions," said Michael MacDonald, a mill employeeand president of United Steelworkers Local 3-144.
The decision to come back was easy for those who'd never had anotherjoband missed the camaraderie of the mill where they'dworked for decades and generations.
"It's a new beginning," he said. "We don't see anything but a bright future. We don't see that there's going to be another shutdown."
Hourly jobs pay an average of $25 an hour and workers retained their previous vacation time, seniority and benefits. Many returning employees had worked 25 or more years at the mill.
"These are the jobs that have given them their houses, their car and college educations for their children," MacDonald said.
Appleton Coated's downfall
Themill's abrupt closure last fall, when it went into receivership, was due to a combination of market forces running against it, said Mazuroski,who'd been one of the prior 10-person ownership group that purchased the mill in 2014 fromFrance-based Sequana SA.
"We didn't have deep pockets. Printing and writing grades were deteriorating rapidly. The cost of raw materials was going up. We couldn't outrun the market," he said. "Our bank provided us a decision, and that decision was receivership. Receivership is a liquidation of the assets."
He said they didn't have the option of going into bankruptcy reorganizationbecause they didn't havedebtor-in-possessionfunding to keep going.
"As coaches say, wedidn't lose the game, we ran out of time," said Corrigall.
Mazuroski said the group of 10 owners lost their investment, but four of themagreed to stay on withtheir belief that the companycould addin-demand brown paper and continue operating.
"We were going for the goal line and couldn't get over it. We were a yard short," he said."Thankfully, Industrial Assets and Maynards invested in that strategy."
He said the number of employees will inch up to perhaps 300.
"We'll never be back to 600 again because of the business segments we're in," Mazuroski said. "It takes fewer employees to support the business overall."
"Some of the jobs aren't here anymore," said Corrigall. Sheeters that previously employed 100 people are not being restarted, he said. The company now sellsrolls, not sheets of paper.
Corrigall and Mazuroski said theycouldn't predict what will happen in the future orif the mill's owners will keep it or eventually sell it.
"We know anoperating mill will be much more valuable," Corrigall said.
