September 2, 2014

Wausau Paper says retooling for tissue not feasible

The economy and jobs, that’s what Governor Scott Walker has been talking about with everything from a new mining bill to incentives for businesses so they can grow.

While in Weston Thursday, Walker was asked if the state could get involved in helping Wausau Paper retool or retrofit mills in Mosinee and Rhinelander to help them convert to making products for their growing tissue market. The governor said there are options available that might work to keep those mills profitable.

Walker said, “We can compete with anybody if we’ve got the technology and innovation advantage, and sometimes that’s where investments in new product lines, sometimes investments in automation and other things can actually save jobs, help keep jobs and grow jobs in the state of Wisconsin.” The governor said they’ve worked with other firms in central Wisconsin to do that.

Although the intent is good, Wausau Paper mills in Mosinee and Rhinelander would not benefit from an expensive conversion from technical specialty papers to tissue products. Director of Investment Relations Perry Grueber said there are two things to understand. First, the technical specialty papers like food wrapping and several other products have a stable and growing market and it wouldn’t make sense to change them. Second, the cost of changing from one type of paper mill to another would be extremely expensive, and would not be as cost-effective as starting from the ground up as they did with the Harrodsburg, Kentucky tissue products plant.

Wausau Paper announced they would put Mosinee, Rhinelander, and also Brainerd Minnesota up for sale just a week ago. There has been some fear that these three mills could have the same fate as Brokaw, which closed last year. Grueber said that is highly unlikely, since Brokaw was a writing and printing paper plant making products that had a huge drop in demand because of electronic substitution.

Grueber said the three mills up for sale were never described as “troubled.” Mosinee, Rhinelander, and Brainerd have some attractive markets and they’re well positioned to succeed as the economy bounces back. He said the company is just choosing a long-term goal of focusing on away-from-home tissue products where there is greater potential for growth and profit.

So far, there are no potential buyers for the three technical specialty mills. Grueber is confident Wausau Paper will continue to service customers with their custom orders, innovate new products, and build the value of the businesses at Mosinee, Rhinelander, and Brainerd. He said the Board of Directors is just preparing to focus on tissue in the future.

You don’t see Wausau Paper products in the supermarket. The majority of their products are used by janitorial services, public buildings, office buildings, factories, and hospitals. Some of their common tissue brands include Bay West ™, EcoSoft™ Green Seal™, and Dubl-Nature® Green Seal™ towel and tissue products.

Larry Lee-WSAU