HOQUIAM, Wash. — For 18 years, the Grays Harbor Paper mill was an underdog success story — a once-shuttered operation that found new life in recycled paper, providing hundreds of jobs in the new green economy and tax revenue to a southwest Washington community that badly needed it.

But the mill's days were finally numbered by the high price of raw materials, tanking sales and cash-flow problems, the company's president, Patrick Quigg, said Thursday morning as he confirmed its closure and the 240 layoffs that came with it. Quigg said a small crew would remain on hand to sell remaining inventory and that he would consider trying to sell the entire plant to a company that might be able to reopen it, The Daily World newspaper of Aberdeen reported.

"I want to acknowledge the continued support of the stakeholders in our community and the industry, especially our loyal employees, without whom we would not have made it this far,'' he said in a statement.

Steam ceased to spill from the mill Wednesday, and the news spread as employees learned of the closure and family members posted condolences online. The company tried to notify employees by phone, but couldn't keep up with the speed of social networking. Dale Friberg, who spent 17 years with the company, said he and many co-workers found out about the closure on Facebook.

"There's still a couple of flickers of hope a few people have, but there's nothing that screams that we'll be back,'' Friberg said. "It's been on life support for several years.''

The mill's history dates to the 1920s. It had been shuttered by 1993, when local businessman Bill Quigg rallied his family and local investors to re-open it. They hired back previous mill employees and launched a new stream-lined operation focused on tapping into recycled paper markets.

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Grays Harbor Paper was frequently cited in documentaries, television shows and national conferences about "green'' industries that worked. It provided recycled paper to Nike, the City of Seattle, Microsoft, REI, the World Bank and other organizations. In 2009, the Legislature passed a bill requiring several state agencies to use at least 30 percent recycled papers; Grays Harbor Paper won most of those contracts.

The Quigg family kept the mill running through tough times, said Hoquiam Mayor Jack Durney, whose parents worked at the mill when it was operated by ITT-Rayonier.

"We need to be enormously grateful to the Quigg family for taking (the mill) on,'' he said. "I have a lot of respect for what they've done.''

Durney said so many layoffs would undoubtedly ripple through local families and businesses. It would also cut into utility and tax revenue at the city.

Aberdeen Mayor Bill Simpson called the development an economic blow. Many of the workers live and shop in Aberdeen.

"It's not something we need in our community," he said. "We need all of the jobs we can get."

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