Traverse City Record-Eagle

Michigan

August 6, 2011

UP paper mill closing after 90 years

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MANISTIQUE (AP) — Stung by the economy, a paper mill that has operated in Michigan's Upper Peninsula for 90 years is closing, a big blow to 150 workers and a community that has benefited from its philanthropy.

Manistique Papers, known as MPI, said Friday it's filing for bankruptcy and seeking a buyer after failing to reach an agreement with a lender.

"The business circumstances leading to this decision were unforeseen. We are as shocked by this as everyone else," general manager Jon Johnson said in a statement. "We had thought and hoped that the lender would allow us to continue operations while we searched for alternative financing."

The Daily Press in Escanaba (http://bit.ly/ovsbZS) said the company cited a steady increase in the cost of raw materials and lower demand as reasons for its financial woes. MPI made paper from recycled fibers.

"While our values and service have not changed since 1920, the American economy has changed," Johnson said.

Manistique, population 3,300, is on Lake Michigan, 90 miles west of the Mackinac Bridge, which connects Michigan's peninsulas.

"Hopefully they find a buyer," resident Debra Rumrill said. "It's just a trickle-down effect; all of those people spend their money here in Manistique. It affects the school system, too. It's tough."

Sandy Patrick, owner of the Aunt Sandy's Health and Gourmet Foods, said MPI made contributions all over Manistique. "It's sad," she said.

City Manager Sheila Aldrich said the company has been an "icon to Manistique and Schoolcraft County."

Johnson said he's not giving up, despite the decision to shut down.

"We will work diligently to find new owners and to bring the noise of a successful paper mill back to Manistique," he said.

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