Sappi weathers pandemic storm

Cloquet's Sappi Mill is continuing to find its place in a pandemic world.

Word that the Cloquet Sappi Mill is laying off some employees while it balances supply and demand as a result of the worldwide response to the COVID-19 virus isn't so much news as the new normal, at least for now.

"These are unprecedented times for anybody and everybody," said Mike Schultz, former Cloquet mill manager and now vice president of manufacturing for Sappi North America, explaining that the mill has been affected by shutdowns in countries around the world, and both increasing and declining demand for its products.

The fact that the Cloquet mill is "diversified" has helped it fare better during the economic downturn, he said. When demand for graphic papers - often used for advertisements - declined initially, the paper side of the mill saw increased demand for its packaging papers that go onto things like soup cans.

"We had a real strong demand for (packaging paper) up front, when everybody was hoarding," Schultz explained. "Now that's starting to fall off a bit, but we expect it to pick up again. And we're seeing a little uptick on the graphics side as things are opening back up."

On the pulp side of the business, the company is reacting to international market conditions as countries such as India and Indonesia - where Sappi exports its dissolving wood pulp to make rayon and other products - shut down business and society in response to the pandemic.

As a result - and because they are able - the Cloquet mill switched from making dissolving wood pulp back to making paper pulp, and they're working to sell that domestically to other paper producers. "But for the most part, all paper producers have been slowed back or shut down, so those markets are limited too," Schultz said.

As a result, the company has had to implement temporary layoffs on a rotating basis since April, impacting employees for between one and two weeks at a time as they shut down production of products that simply aren't needed at the time. According to a company statement, while workers are laid off at the Cloquet, Westbrook and Somerset (Maine) mills, Sappi is funding the employee portion of their medical insurance premium. Laid off employees are also eligible for the extra $600 a week unemployment insurance available under the federal CARES Act.

It's a struggle, but Schultz said he is still optimistic about the long-term viability of the Cloquet mill, and hopeful the local mill will find even more ways to diversify in the future.

Additionally, the troubled international market has a silver lining of sorts: it has slowed delivery of imported paper, which will help with sales of domestic paper.

"For everybody in the United States, any kind of industry, I think you're going to see - at least as things open back up - more of a run for domestic producers of paper or anything else just because of the lag time to get materials," he added.

Promoted to VP in September of 2019, Schultz said it's "definitely trial by fire when you have something like this COVID situation hit."

But he credited excellent people at all the North American mills with helping him and the company adjust to the changes.

"The way everybody stepped up and responded and has been working together through this has been incredible," he said.

Another positive outcome of the many changes wrought by the pandemic ... Schultz, like many others forced to work from home, was able to work from his home in Carlton County rather than Boston, and spend more time with family recently.