Verso, the producer of coated paper and specialty paper products, will begin shutdowns later this month, when it permanently closes a paper machine at its mill in Bucksport, Maine. The shutdown will cut the company's annual coated groundwood capacity by about 10% and reduce the mill's work force by roughly 125 employees.

Later this year, Verso will shut down two paper machines at a Minnesota mill, eliminating roughly 103,000 tons of supercalendered paper capacity. The closure will reduce the mill's workforce by about 175 employees.

"While improved from the recent lows of 2009, demand for coated groundwood papers continues to face headwinds," said Chief Executive Mike Jackson, adding that unfavorable cost structures and continuously rising input costs were also cause for the decision.

The company has been trimming expenses recently, helping it to narrow its loss in the second quarter, though it has previously cautioned that rising input prices remain a challenge for the business. Verso expects to report third quarter results early next month.

All three machine shutdowns are the result of higher cost equipment in an oversupplied market. While the two supercalendered machines and the one coated groundwood machine account for a total of less than 200,000 tons in the North American market place, we have already seen a large amount of capacity reduction in 2011, specifically in the SC market.

In the near term, our customers will feel very little impact from these announcements. In the long term, Brown and our customers will see the continued effect of what has been happening for years – mill discipline and a tightened supply base. The Brown Paper Group is already working to create a seamless transition for any customers that are using paper from these machines, and we currently predict no issue in service to any of our customers.