Sappi Cloquet plant workers to return from layoff, prepare for pulp mill outage
The Cloquet paper producer will take advantage of a soft market to undertake extended annual plant maintenance.
Workers at Sappi's Cloquet paper mill will return to work Thursday following a one-week layoff as the plant prepares for a three-week outage.
Tom Radovich, managing director of Sappi's Cloquet operations, said the facility usually schedules an annual outage in April to clean and maintain the plant's pulp mill.
"We plan on actually still executing that, although it was delayed a couple weeks as a result of the coronavirus," Radovich said. "We talked about it the early part of March, not knowing how things were going to transpire. And as a result of the order situation for both our paper and pulp products, we decided to execute the outage here at the end of April."
Normally the outage lasts about 1 ½ weeks, but this year he said it will be extended to nearly three weeks, as the company takes advantage of a soft market to tackle some additional maintenance work.
"But we have seen the impact overall of the coronavirus, in terms of how it has affected our business — no different than UPM," he said, referencing a temporary shutdown UPM Blandin recently announced at its Grand Rapids mill .
"We make different products than they do. But our graphic papers, our packaging papers, as well as our dissolving pulp have all had an impact as a result of the coronavirus. And it's really worldwide. Our dissolving pulp is sold overseas, and some countries overseas are really in lockdown, so you can't really get product over there," Radovich said.
"So, this is basically a result of the way the economy has changed," he said.
The Cloquet mill temporarily ceased production and laid off workers from April 15-22.
"It's not really anything new to take curtailment periodically, because a lot of times our business has a certain seasonality to it through the year. What's unusual is for us to do a layoff. That's what's unusual," Radovich said. But he noted that laid-off workers were eligible for enhanced unemployment benefits through COVID-19 relief programs.
"The employee doesn't really get impacted that much because of the CARES (Corona Aid, Relief and Economic Security) Act. In addition to the Minnesota unemployment benefit, they also get the $600 per week through that CARES Act. So overall, if you look at when they're working versus when they're laid off, there really isn't much difference in their pay," said Radovich, noting that the company continued to cover workers' medical premiums during the layoff period.
"The other thing is that they're not at the mill. So, there are less interactions. They're at home," where he said there is less risk of the coronavirus spreading. "It's kind of a win-win actually."
Radovich characterized the Cloquet plant's current order situation as being "in a state of flux."
"We're just kind of monitoring week by week what's going on with the economy," he said.