Trending / Economic Impact: Cascades Scappoose tissue plant closing, St. Helens plant limited

One of the regions largest employers is cutting jobs and reducing services.

Cascades Tissue Group has announced that it will cease operations in Scappoose and cut back production in St. Helens, impacting dozens of local workers and the two cities’ economies.

One of the two paper machines at the St. Helens plant will be shutdown.

Coming closures

Beginning in July, Cascades Tissue Group will "progressively close underperforming plants" in Barnwell, South Carolina, and Scappoose, Oregon, according to a release on the company's website. In addition, Cascades Tissue will also shut down one of the two tissue machines at its St. Helens plant.

Cascades filed formal notices of worker layoffs following the announcement in late April, in accordance with the 1988 Worker Adjustment and Retraining Notification Act (WARN).

The same day they announced the closures, Cascades filed WARN notices of permanent closure of the plant in Scappoose that would have 88 employees terminated. On May 9, a second WARN notice was filed for a large layoff at the St. Helens Paper Mill that would see 27 workers laid off with recall rights and 18 employees terminated.

Scappoose Mayor Joe Backus released a statement following the announcement of the closure in April.

"The City of Scappoose is disheartened by the closure of Cascades Tissue and the loss of 94 family-wage jobs in our community. We extend our sincere sympathies to those who will be losing their employment and hope they are able to secure new positions soon," Backus said. "In the coming days and weeks, we will work closely with our economic development partners with the intent of finding a viable replacement company who will once again offer local employment opportunities in Scappoose."

Economic impact

The Quebec-based company spent $64 million on the 284,000-square-foot Scappoose facility, which is located on a former ranch on West Lane. The plant was completed in 2017. Now, just six years later, the plant will close its doors.

Cascades is also the top taxpayer in St. Helens and paid the city $690,417.70 in the fiscal year 2022-2023. Mayor Rick Scholl said the cuts at the plant will impact the city.

"It's going to affect the economy by reducing property taxes and living wage jobs in the community," Scholl said.

Columbia Economic Team (CET) Executive Director Paul Vogel said that his team is already working with local organizations and Cascades to make a smooth transition for the effected employees, and work to fill the void left by Cascades’ exit.

"Clearly, the immediate impact is one of shock and personal impact for the 100+ employees that will be affected. Fortunately, our regional workforce partners, including NW Oregon Works, WorkSource, and PCC/OMIC already are in touch with Cascades’ HR team and to some extent, possibly, the employees directly," Vogel said. "We’ve also been contacted by Wauna Credit Union, which wants to directly reach out to affected employees to provide whatever planning and assistance they can as a lender with mortgage holders, other borrowers, and customers/members."

These cooperative efforts are intended to support and lessen the impact of these jobs going away, Vogel said. The longer-term impacts will be determined by "the disposition of the plant itself." The CET has a meeting scheduled with Cascades’ executive leadership to recruit prospective buyers for the plant.

"The best case would be a coordinated approach within the paper-making sector to identify an appropriate new owner as quickly as possible, one that can immediately absorb a trained local workforce that's available," Vogel said.

The job layoffs and plant reductions plants in South Carolina, Scappoose, and the St. Helens were ordered by the company because the facilities have not been meeting the expected capacity. The facilities have a combined total annual rated capacity of 92,000 short tons of tissue paper and 10 million cases of converted product and have been operating below capacity producing 56,000 short tons of tissue paper and 5 million cases of converted product in 2022, with many of these shortcomings being on the West Coast, according to Cascades’ news release.

Economic strategies

While the closures are an unwelcome development, Vogel said there were indications of financial trouble in early 2022. The company's interest and need to expand its market share on the West Coast was crippled by pandemic shutdowns.

"Unfortunately, production ability doesn't shape the market, the market shapes production and off-take," Vogel said. "Cascades’ Scappoose plant didn't really get a solid running start due to these unforeseen and unprecedented circumstances."

Vogel also said he has concerns about the commercial viability of the operation in St. Helens due to operating at a limited capacity. Regarding Scappoose, Vogel said that the optimal outcome would be to attract another paper manufacturer to take over the plant, which is still in good condition. Barring that, the backup strategy includes helping market the building and property as assets.

St. Helens Communications Officer Crystal King said that St. Helens is looking at a variety of ways to increase economic development by utilizing local partners like CET, South Columbia County Chamber of Commerce, and St. Helens Main Street Alliance. City projects and initiatives like the riverfront project, an Enterprise Zone, and a designated Opportunity Zone.

"While we won't know the extent of the impacts right away, the City of St. Helens has numerous economic development initiatives it is working on," King said. "Economic development in St. Helens is a key goal identified in the City Council's Strategic Plan, and City efforts under this goal are focused on building a solid economic foundation for a strong, diverse, and sustainable local economy."

Closure costs at the Columbia County facilities and the South Carolina plant, including severance, are expected to total approximately up to $25M, according to Cascades Tissue group.

Follow developing stories at thechronicleonline.com and in the Wednesday print editions of the Chronicle.

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