Due to a decline in product demand brought on by COVID-19 in the U.S. and European retail clothing industry, Cosmo Specialty Fibers in Cosmopolis will begin to temporarily shut down operations Friday.
“Due to the unprecedented economic events across the world and here in the state of Washington caused by the coronavirus (COVID-19), we have made a pre-emptive decision to temporarily suspend operations at the mill,” said CEO Nicholas B. Dottino in a statement released Monday. “Once the global retail clothing sector recovers, we expect that the South East Asian textile industry will quickly ramp back up and our order flow should also recover.”
“An orderly shutdown” will begin Friday morning, with the complete curtailment of operations by Friday, May 8.
“While currently undetermined, we expect this temporary outage to last approximately 90 days,” said Dottino.
Cosmo will continue to employ limited personnel to provide security for the facility, maintain regulatory compliance and develop a plan for a startup as soon as the market recovers, read the statement. The mill normally runs 24 hours a day and employs close to 200 people, producing wood pulp for use in the manufacturing of rayon fibers.
“Our decisions are always driven by doing what is best for the long term, and this decisive action is needed to do our part to protect our team, the city of Cosmopolis and the surrounding communities of Grays Harbor County,” said Dottino. “Our workforce is healthy and in almost full attendance. Our supply chain, while also impacted by the economic downturn, remains strong and resilient.”
“The temporary closure of Cosmo Specialty Fibers is difficult for the entire city,” said Cosmopolis Mayor Kyle Pauley. “First and foremost for the hundreds of workers that are impacted. These are people that live here or work here and are a vital part of the Cosmopolis community, and we are doing everything we can to facilitate their needs.”
The temporary shutdown comes after a time of success amid trade wars and tariffs, and Dottino expects the company to rebound quickly once the market turns around.
“Many would argue that the future of Cosmo is bright, and I wholeheartedly agree with that sentiment,” he said. “The amazing results that the business achieved during the significant headwinds of the trade war and tariffs were rather noteworthy in many respects. Our business fundamentals and overall strategy is sound. Were it not for the worldwide economic downturn caused by the coronavirus, Cosmo Specialty Fibers was steadfast on exceeding the record-breaking performance of calendar year 2019.”
Pauley said, “The city has been aware of the COVID-19 related complications with the company since February, when they were struggling with the China market shutdown and their requests to the state Legislature for assistance. I commend the conversations through this process with local, regional and state leaders as we navigated these issues. Now, with these additional stressors here in Washington, it appears that it finally came to a head.”
The impact on the city could be far-reaching, though Pauley said steps the city has taken amid the pandemic include the possibility of a temporary shutdown of the facility.
“As a city it will hit us hard as Cosmo Specialty Fibers is the primary contributor to our local B&O taxes, utilities and property value,” said Pauley. “We have seen what a longer closure of the mill site can do as we are still recovering from Weyerhaeuser and its exit. We had to make difficult decisions 14 years ago with our budgeting, and we have to make some difficult decisions now.”
Pauley continued, “The hope and focus of everyone, both at the City of Cosmopolis and I am all-but-certain at Cosmo Specialty Fibers, is that the nation can recover from this pandemic and it will be possible to return to normalcy as soon as possible.”
