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Story Archives: Economist: Mill closing will affect region


Economist: Mill closing will affect region
by Michael DeVault - posted Wednesday, November 26th, 2008 @ 7:36 amE-mail Story E-mail Story | Print Story Print Story 
The effects of the closure International Paper's plant in Bastrop will not be limited to Morehouse Parish but will instead spread across northeastern Louisiana, according to University of Louisiana-Monroe economist Bob Eisenstadt.

IP announced late last week it would permanently shutter its pulp mill by year's end, eliminating some 550 jobs. A $30-million annual payroll will disappear, too.

"If you want to look at the overall impact of the IP closure, IP directly and indirectly amounts to 30 percent of the Morehouse Parish economy," said Eisenstadt. "Having said that, that doesn't mean it is all concentrated in Morehouse Parish."

Much of the money generated by the plant flows along U.S. Highway 165 into Ouachita Parish through numerous avenues, including retail sales and medical care.

Eisenstadt said it is still too soon to place a figure on the impact to Ouachita Parish businesses.

"How much Ouachita Parish will be affected by this is anyone's guess at this point," Eisenstadt said. "I certainly expect there to be some contraction of retail sales and perhaps some employment effects as well."

However, because of severance packages and unemployment insurance IP employees will collect, it could be months before the magnitude of the plant closure begins to take shape through job losses and decreased sales in the retail sector.

"None of that is going to be felt immediately," Eisenstadt said.

Instead, Eisenstadt said it could be as long as two years before the area absorbs the loss. Despite the protracted amount of time, Eisenstadt said the effects will arrive in the near future.

"Over a period of time, we could see as much as an $80 million contraction in household income throughout the area, concentrated mostly in Morehouse and Ouachita parishes," Eisenstadt said.

Gov. Bobby Jindal traveled to Morehouse Parish Monday to talk to mill workers and community leaders.


While in Bastrop, Jindal stressed the regional and statewide impacts of the mill's closure.

"It's a blow to our whole state," Jindal said. "When one place has trouble, we all have trouble."

Jindal said the state would work with the community to overcome the loss.

Jindal told Morehouse officials he would support the appointment of an economic development expert to develop a transition plan for the community following the mill's departure.

"We are going to find a way to create opportunity out of this situation," Jindal said. "I came here to do as much listening as talking today, and I have stressed again that the state continues to offer our support for making the best of this situation by working to reopen the facility."

The Bastrop mill was built in 1929 and has long been considered the backbone of the Morehouse Parish economy.

International Paper had considered closing the mill in 2006 but transitioned the mill in 2008 with a $10 million investment to convert the mill from finished paper products to producing pulp.
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