Changes at Resolute expect to be felt on both sides of the border

The idling of No. 5 and the kraft mill were market driven, said the company.

“The markets for these products are challenging and are expected to remain so. The kraft mill situation is particularly difficult given Fort Frances’ operating configuration and the recent decision by a key customer to stop consuming the pulp supplied by Resolute to its mill,” said Richard Garneau, Resolute’s president and chief executive officer, in the Nov. 7 announcement. “Our kraft mill’s drying capacity is limited to about 40 percent of its production capacity, making it impossible to continue operating the mill in a profitable manner.”

Resolute said it’s exploring alternative product possibilities for its Fort Frances pulp mill, which will be idled in a manner that will protect the equipment. The idling of No. 5 is driven by the decrease in consumption as well as the high value of the Canadian dollar, said the company in a statement.

Approximately 239 employees will be impacted by the idling.

Lori Lyman, Boise Inc. public affairs manager, said the actions at Resolute should not have an impact on operations at Boise’s paper mill in International Falls.

“The sister mills have been two separate companies for quite a while,” she said.

Boise’s Falls mill discontinued purchasing pulp from Resolute in October. The Boise mill’s pulp is now supplied by the company’s Wallula, Wash., mill.

Lyman said the paper industry is facing increasing challenges.

“We can’t speculate on the issues the Resolute faces, but the paper industry in America is becoming more competitive as demand for some paper declines, largely due to electronic substitution,” she said. “People are just not using paper as they once did.”

The local mill, she said, remains focused on “delivering solid results and we do that by working safely and running reliably, keeping costs down and looking at how we can do things better and in the end, serve our customers with distinction.”

Lyman said the Falls mill has periodically taken downtime on its machines to balance production with demand for products.

Resolute employees displaced by the idling are welcome to apply at the Falls mill as openings occur, she said.

She declined to respond to a rumor that Boise had made on offer to purchase the Fort Frances mill.

Leaders of Borderland’s economic development agencies expressed concern about the impact to local families in the larger community and to Falls businesses.

International Falls Economic Development Authority President Gail Rognerud said the Falls and Fort Frances will likely experience a negative economic impact as Fort Frances residents face financial concerns because of the impact to Resolute employees.

“As a sister community, we stand behind the Fort Frances council and community in any way we can to help them with this crisis,” she said. “I am saddened by the announcement and hope that there is some effort to replace or rebuild that business in Fort Frances.”

Koochiching Economic Development Authority Director Paul Nevanen agreed that the impact will be felt on both sides of the border.

“My initial reaction is first the difficult impact on the effected people and their families — especially around Christmas,” he said. “This isn’t some abstraction — these are real people and our neighbors.

“Secondly, even though there’s a physical border between us, we know that the scale of this job loss will have an effect on both sides of the border.

“Thirdly, the announcement is part of a larger story being played out throughout the state and region on the challenges facing the forest products industry — and the new reality that’s being presented. We’re at a difficult time and place in regards to the forest products industry right now. A last thought is the need from an economic development perspective to continue to try to diversify the local economy and be smart and focused in pursuing realistic opportunities.”

Shawn Mason, Falls director of economic and community development, said Fort Frances and the Falls have much in common.

“We share resources, our lifestyles mirror, we are friends and family, so the announcement certainly resonates with us,” she said.

Fort Frances will experience the greatest negative impact from the job loss and International Falls will witness some residuals, she said.

“However, I believe the current situation presents the Town of Fort Frances with a critical opportunity to reorganize, recoup and grow,” she said. “It will take dynamic leadership, citizen involvement and genuine support from provincial and federal governments. It looks like a big mountain to climb, and it no doubt is; but I believe the town of Fort Frances can collectively pull together to get through this and begin building a more stable and progressive future.”