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Timber Professionals Cooperative cautiously optimistic about Verso acquisition

Published: Dec. 21, 2021 at 4:47 PM CST
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WISCONSIN RAPIDS, Wis. (WSAW) - The president of the group looking to purchase the paper mill in Wisconsin Rapids said he is cautiously optimistic about a Scandinavian company acquiring Verso, the current owner of that mill.

Monday, BillerudKorsnäs and Verso announced the acquisition, with BillerudKorsnäs purchasing Verso’s outstanding shares for about $825 million. The president and CEO of BillerudKorsnäs, Christoph Michalski laid out in a press conference their plans to ramp up production at Verso’s Upper Michigan mills, however, he said they were still determining whether to sell the Wisconsin Rapids location.

“We’ve been working on things right along actually with Verso,” Dennis Schoeneck, the president of the Timber Professionals Cooperative said. “They’ve just been dragging their feet and now I know exactly why.”

The cooperative has tried to purchase the Wisconsin Rapids mill twice since it closed in the summer of 2020.

He has been frustrated with the government process in helping the cooperative in purchasing the mill. Though, he acknowledged Verso, or perhaps BillerudKorsnäs, would have to be an interested seller. He believes the process with the state government has been too political and slow, pointing to the loss of the mill in Park Falls which it also tried to purchase. He also noted the help the state has given to other industries hit by the pandemic.

“If they would give us what they gave tourism, holy mackerel, we would have been rocking and rolling a long time ago.”

Schoeneck, who also owns and operates a forestry products company, said he is encouraged that BillerudKorsnäs has a global understanding of the industry and that they are planning to increase production in Upper Michigan, where much of their pulp product now goes.

“Well, of course, that means more of a home for what we do. The problem is we want to keep it in Wisconsin.”

He said there has been no replacement for a quarter of Wisconsin’s pulp timber that the Wisconsin Rapids mill once took in, even if these other mills increased production. Schoeneck explained forestry companies are harvesting less because the mill have more than enough supply.

“When you see the price of lumber at Menards and such, especially a year or so ago when it was skyrocketing, we never-- that never filtered down to the producer,” he stated. “So we’ve been struggling along and when Verso closed that mill, the first thing that happened is they dropped the prices of what they pay for us, of what we do. That hasn’t come back but everything else is going up, you know, fuel and parts, and here we are at the-- you know getting my machine worked on today, well it cost more than it did a year ago.”

He brought in a feller buncher to have the tracks replaced, which need to be replaced about every three years. The cost to replace those tracks went up by $5,000 from what he was quoted a month ago and it roughly doubled in price compared to the last time he replaced them.

McCoy Construction & Forestry in Merrill said their overall costs of that equipment have gone up about 12% since the pandemic began, due in part to the shortages in materials, and supply chain issues. Schoeneck said it was difficult for them to find the steel tracks needed to do the work on his feller buncher.

Schoeneck said timber companies are just breaking even, so the mill in central Wisconsin is necessary and he believes everyone in the process can profit. In response to Michalski’s comment that the Wisconsin Rapids mill and hydroelectric company are “minor, minor assets,” he said it brings a smile to his face.

“They can call it what they want. Then sell it to us as a minor asset and we’ll put it to work and we’ll make it go.”

NewsChannel 7 reached out to Verso for comment relating to Schoeneck’s price comments directed at mills, but it declined to speak outside of the press release related to the acquisition.

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