Paper Company to Close Eureka Pulp Mill

Blaming costly environmental demands and a tough market, Simpson Paper Co. said Friday that it will shut its seaside pulp mill in Humboldt County and halve production at a Pomona plant, eliminating a total of 437 jobs.

The action is a severe blow to the state’s beleaguered North Coast, where the Eureka plant has operated on a spit of land in Humboldt Bay since 1966 and is one of the town’s biggest employers.

Unemployment in the region, with the timber industry beset by troubles it attributes to restrictions on harvesting redwoods, has stood at more than 10% for several months. Louisiana-Pacific Corp. will continue to operate its nearby pulp mill, which employs 250.

Word of the closure, slated for mid-February at the earliest, came Friday afternoon. State law requires the company to give 60 days notice.

The closure will mean “a pretty significant impact . . . that will be felt throughout the Christmas season and well beyond,” said Christopher Wallis, program coordinator for the Private Industry Council of Humboldt County, a group that helps displaced workers look for jobs.

Although not completely unexpected, the announcement came as a shock to workers.

“This doesn’t just affect us; it affects thousands of people,” said Dennis Gray, 45, of Eureka, a maintenance worker at the mill.

The county has only 4,500 jobs left in lumber and paper production, and 262 will be lost at the Simpson mill. The industry has lost 1,200 jobs over the past four years, said Linda Haynes, executive director of the Redwood Region Economic Development Commission in Eureka. She estimated that as many as 150 other jobs at restaurants, stores and other businesses would be lost as a result. The mill has an annual payroll of about $12 million and pays more than $1 million in property taxes.

Simpson, based in San Francisco, said it was forced by economics to close the plant. It cited “unreasonably restrictive federal and state forestry policies” that reduced the supply of wood chips, causing the price of that raw material to rise by 40% in the last year.

Competition for chips from offshore producers and a depressed market for fiber products also hurt the company.

Last September, in an unusual case brought by the Surfrider Foundation and the U.S. Environmental Protection Agency, Simpson and Louisiana-Pacific agreed to spend more than $50 million to dramatically reduce toxic discharges from their two pulp mills.

They also agreed to install solar-heated showers at nearby beaches so surfers could wash off the toxic contaminants until improvements could be made at the mills. The mills, which make pulp used to manufacture high-quality paper, were dumping 40 million gallons of untreated waste into the ocean a day.

Times special correspondent Marie Gravelle in Eureka contributed to this story.