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1st Urban shutdown said temporary

April 23, 1997

By JULIE E. GREENE

Staff Writer

Production at 1st Urban Fiber's paper recycling plant could be shut down the rest of this year, but the plant will not be closed permanently, a company official said Tuesday.

It could take nine months for the recycled pulp market to bring prices back up to a profitable level, said Robert Strasburg, 1st Urban's executive vice president. Strasburg is in charge of the local plant while the company's president and general manager, Bruce Hynes, is out due to medical reasons.

When the plant starts production again, 1st Urban will return to its full employee complement of 95, said Strasburg. Last Thursday, company officials announced 40 of those employees would be laid off indefinitely.

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The plant was gearing down production more than a week ago, said Hagerstown City Light Manager Terry Weaver. The plant's usual 15-megawatt peak demand for electricity had fallen off to around 3 megawatts, he said.

While production is suspended, the company's remaining 55 employees will work on $6 million worth of upgrades to the plant, including the wastewater treatment plant, company officials said.

The plant at the corner of Eastern and Memorial boulevards produces dried pulp from waste paper that is used to make colored paper, fine writing paper and other products.

The 1st Urban plant is one of three de-inking facilities across the nation that has shut down, at least temporarily, since last fall as the price for recycled pulp has plummeted, according to an industry expert. There are 12 such plants in the country.

"That does happen from time to time, unfortunately," said Mahendra Doshi, executive editor of Progress in Paper Recycling, a quarterly journal on paper recycling technology.

The American Fiber Resources plant in Fairmont, W.Va., and the Northeast Recycling Associates' plant in Fitchburg, Mass., have been shut down since last fall, Doshi said.

"We are at the lowest point in the market," Doshi said.

The price of dried pulp on the market is about $450 per ton, he said. It needs to be above $500 per ton for paper mills to be profitable.

According to an April 17 letter to 1st Urban employees from Chairman Carl C. Landegger, the plant will be shut down until company officials are able to sell at a price around $625 per ton. Landegger is chairman of Pencor First Fiber, a general partner of 1st Urban.

The peak price for pulp was about $950, Landegger said.

The good news is the market is cyclical and is expected to improve in the next six months, Doshi said.

Until then, 1st Urban has about $30 million in reserve funds to support its operations, said Mayor Steven T. Sager.

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