POLITICAL PERSPECTIVE

A Look Back at Panama City’s Paper Mill

by: Will Cramer and Tem Fontaine

After operating for more than 90 years, Panama City’s paper mill has closed its doors for good. Though the announcement from WestRock caught most offguard, many in the community will always have fond and grateful memories of the opportunities the facility provided Bay County area workers.

In 1919, the mill, which had been valued at $3 million, was purchased for $1 million by the St. Andrews Bay Lumber Company, formed by Minor Keith and WC Sherman. Later that year, the St. Andrews Company purchased the Moore Timber Company, whose Lackawanna property, according to the Panama City Pilot, “…gives Mr. Keith, who is vice president of the United Fruit Company, a splendid dock in deep water on East Bay where any of the Fruit Company’s vessels can land; and for his lumber company, about 35 miles of first class railroad, 82,000 acres of land, one of the best mills in this section, about three million feet of lumber, and the hamlet of Bay Harbor, which is the best constructed mill town in the South.”

When I finished my 42 years at the mill, my wife’s family had worked there for 90 years. Everything I have in life, including a wife, came from the mill. My story is not unlike many others in our community that had multiple generations at the mill.

- Tem Fontaine

Through the 1920s, after decades of timber harvesting with very little replanting, the supply of usable timber had dwindled and most sawmills had closed, including those at the Lackawanna property. Fortunately, northern paper companies, who had been relying on an also-dwindling supply of Canadian spruce, had begun to look to relocate to the South where slash pine was readily available and could be regrown in 15-20 years (as opposed to 70 years for Canadian spruce).

So, Wilson, Sherman and city and business leaders like RL McKenzie, Frank Nelson, Sr., and the Panama City Chamber of Commerce (as it was called then) came up with a competitive proposal wherein the city would purchase the Lackawanna property and enter into a 50-year lease with Southern Kraft. The city built docks, Southern Kraft operated the facility and the two shared the revenue that would constitute the lease payment. On April 10, 1930, the city approved the agreement, and on February 21, 1931, the first shipment of paper left Panama City on the Bay Line Railroad.

The Panama City facility was the first plant to make linerboard commercially on a fourdrinier design machine. The mill experienced great success and International Paper (IP) embarked on land management to make trees a renewable resource. In 1964, a bleach plant was added to convert the No. 2 machine from linerboard to bleached pulp for printing and writing grades and fluff pulp for disposable diapers and other absorbent paper products. In the 1970s IP decided that a large-scale modernization of Panama City was not feasible and sold the mill to Southwest Forest Industries in 1979.

Since the announcement from WestRock that the mill would close, the Bay County community has done what it does best; support one another. The Bay County Chamber helped facilitate meetings between the area’s top manufacturers. Alongside the Economic Development Alliance of Bay County, CareerSource Gulf Coast and others, Bay County leaders have worked tirelessly to find new employment for workers displaced by the closure. Services and programs were activated immediately to help facilitate and assist workers in job searches and training programs.

From the tree farmers in surrounding counties to the Stevedores that loaded product on ships to foreign ports, the Panama City mill served customers globally with a valued product that will be missed in the marketplace.