Column: Change in plans at Billerud, what does it mean?

ESCANABA — Certainly the big news of the week was the decision announced by Billerud’s President and CEO, Ivar Vatne that they would be shifting strategies for the Escanaba Mill conversion. It didn’t take long for some to view this news in the worst light for our area.

The reality was pretty simple math, the cost of the conversion had gone up dramatically since their original announcement in 2022. The company did a study to see if they could modify the original plan based reuse of certain equipment and modification of some of the original designs. But in the end the board of directors’ decision was execution of the original plan no longer made financial sense based on the current economic conditions. The announcement had nothing to do or anything negative regarding the Escanaba mill, the original plan couldn’t be executed with so much more costs involved. The financial risk vs the future reward didn’t make sense at this point.

The great news in Mr. Vatne’s message was how impressed Billerud’s Board is with the North American assets. Their studies regarding the different paper machines, production, and flexibility for additional uses of their equipment have provided some new paths for the future. The company can make more modest investment into the current assets and find a road to success. This is good news for the Escanaba and Quinnesec mills. Some questioned during the press release the comment that Quinnesec was the crown jewel of the North American assets. Keep in mind the Escanaba mill has be in production since 1911 on its site, the Quinnesec mill was put into production in 1985. Not a paper industry expert, but I would venture a guess there have been many changes in technology that went into the construction of the newer mill. What did we learn from the experience leading to and announcements this week. The mills are in a good place, staffing should remain at current levels and there will still be investment into the mill to make it more competitive & flexible. The Escanaba mill has an estimated $360 million annual economic impact in our area.

Senator Ed McBroom mentioned the level of collaboration it took to get the $200 million incentive package in place in short order to assist Billerud with its original plan. The support from the governor, elected officials, local officials and economic development partners was and is a blue print for future success. No one had a political agenda that was put in front of what can we do to make this happen. We should all take that vision of team work away from this project and utilize it in all of our future projects and interactions with each other. If our interaction isn’t described by terms like intimidation, lack of respect and closed to differing viewpoints, but focused on collaboration, partnership and open mindedness we will be extremely successful!

We have many opportunities ahead of us as a region I hope we can work together to achieve them. Have a great Memorial Day weekend.

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Ed Legault is director of the Delta County Economic Development Alliance


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