Wausau Paper Closes $8.7 Million Operation

Wausau Paper announced it was closing the Brainerd mill in February and ceased production in April.

Screen Shot 2013-12-23 at 12.26.21 PMThe mill employed 134. Wausau started production at the Brainerd mill on Nov. 17, 2004.

Products from the Brainerd mill were shipped globally to markets in Europe and Asia.

Just two years ago, Wausau Paper invested $27 million to convert the Brainerd mill to technical specialty grades, such as those used in masking tape and to a limited degree packaging for the food industry. The lack of a revenue stream earlier than expected following an exit from the printed paper market played a factor in the mill’s profitability.

Screen Shot 2013-10-15 at 12.07.12 PM“There should be no issue with the performance of the work force,” Perry Grueber, Wausau spokesman, said in February. “The folks in Brainerd have been extraordinary. … This is a very regrettable situation for us.”

In March, Wausau Paper signed a letter of intent to sell its Wisconsin specialty paper mills for about $130 million. The mill in Brainerd was not part of the deal.

In Wisconsin, the Milwaukee Journal Sentinel reported about a yearlong fight for control of Wausau Paper with Starboard Value, an activist Manhattan hedge fund with a record of pushing boards to change directors.

Screen Shot 2013-11-26 at 3.48.21 PM“Pressure from Starboard last year prompted Wausau to shut its oldest mill in the village of Brokaw, the mill that founded the company in 1899,” the Journal Sentinel reported in March. “Starboard’s pressure also compelled Wausau to make an abrupt announcement in January that it will sell its remaining Midwestern mills in Rhinelander, Mosinee and Brainerd.

“Wausau barely gave itself five weeks to find prospective buyers, however, before it made another equally abrupt announcement that it will close the Minnesota mill.”

Wausau Paper reached an agreement with Starboard Value to change the Wausau board after a threat of a proxy fight at a shareholder meeting.

In October, Liberty Paper Co. of Becker was identified as having an interest in purchasing the Brainerd mill. Liberty makes craft paper or brown paper such as grocery bags. Later Liberty reported it was no longer interested citing environmental concerns.

The city of Brainerd signed a purchase agreement of $4.115 million to buy the mill’s hydro plant on the Mississippi River, which Wausau was selling separately from the mill.

The mill has a long history in Brainerd. It began as the Northwest Paper Co. in the first years of the 20th century with efforts including those of Charles A. Weyerhaeuser and R. D. Musser. The paper company bought the Northern Water Power Co. on the banks of the river and the C.F. Kindred Dam in northeast Brainerd.