McKinley Paper puts retooling plans on hold at Port Angeles mill

McKinley Paper Co. has put on hold plans to retool the Nippon Paper Industries USA paper plant it purchased almost a year ago for manufacturing cardboard linerboard.

McKinley Paper puts retooling plans on hold at Port Angeles mill

The planned target of December as a startup date is out of the question, said Herb Baez, vice president of the Mexican-owned company’s U.S. operations. “That’s not going to happen,” Baez said. “We are taking it a day at a time.” Baez said he hopes the plant can begin production in 2019 but could not be more definitive. “Right now, we don’t have anything specific,” he said.

City Manager Dan McKeen said when the plant has operated it pumped about $500,000 a year in electric utility taxes into the city’s general fund, paying for public safety, parks and other city services. “It could lead to layoffs if they don’t start up early next year,” McKeen said. “We really need to talk to them as we are putting together our budget.”

The prospect of the plant’s continued shutoff of manufacturing past December “is very concerning,” Mayor Sissi Bruch said Monday. “We have to live within our means,” she said. “We are just going to have to cut services, which will probably entail layoffs, but we are going to keep our fingers crossed that they can start up.”

McKinley is owned by Mexican paper maker Bio-Pappel. With a second paper plant in Pruitt, N.M., McKinley uses recycled cardboard for manufacturing cardboard-box liners. McKinley purchased Japanese-owned Nippon on March 31, 2017, for $20.6 million, including a $91 million biomass electricity cogeneration plant, after Nippon had ceased production of products including telephone-book paper, citing market conditions.

Bio Pappel is an integrated producer of containerboard, uncoated free sheet, newsprint, corrugated boxes, cut size paper, notebooks, paper sacks, and other specialties. The company operates 30 production facilities and 13 recycled fibers collection centers in Mexico, the U.S. and Colombia. Currently, Bio Pappel employs 11,068 people and produces approximately 3.2 million metric tons per year of paper and packaging grades.

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