ALTOONA — Despite changes over the years, the paper mill industry remains a big player in the Blair County economy.

According to a recent study conducted by the Penn State Workforce Education and Development Initiative, the paper mill industry is responsible for generating $14.3 million in annual compensation for every 100 paper mill workers employed in Blair County.

With Appleton in Roaring Spring employing 470 workers and American Eagle Paper Mills in Tyrone employing 240, that translates into a total of about $100.1 million.

Those figures were derived from combining wages, pensions and income of the mill employees with those of employees whose jobs are created because their Blair County firms supply the paper mill industry with goods and services. Those figures also include spending by employees of the paper mills and the supplying industries.

The study also showed that the industry generates about $4.8 million in property taxes to Blair County governments.

The spinoff effect plays a significant role, said David L. Passmore, director of Institute for Research in Training and Development, who completed the study with Rose M. Baker, director of Center for Regional Economic and Workforce Analysis.

The paper mills employ people and pay them wages, and they spend their money. At the next level, the mills buy supplies such as water, electricity, transportation and other services from other entities. The employees of these other industries spend their money in Blair County. That income then generates other jobs and things that people buy, Passmore said.

"It is the multiplier effect. There are many spin-off jobs as a result and they provide a major impact," said Martin J. Marasco, president and CEO of Altoona-Blair County Development Corp., which asked the Penn State group to conduct the study.

As the paper industry has been impacted by the electronic revolution — the need for less paper — Blair County remains unique as home to two of the three remaining paper mills in western Pennsylvania. Domtar in Johnsonburg is the third.

More than 25 percent of Pennsylvania's 3,100 paper mill workers work in Blair County, Baker said.

"They are in an elite crowd that they are still there. It is remarkable they are still there and are providing income and good jobs for Blair County folks," Passmore said. "Any paper company that is operating now is doing something really well."

To survive, smaller mills, like Appleton and American Eagle Paper Mills, have turned to specialty products.

"The older or medium-age paper mills are not in existence or have converted to specialty grades of paper," said Dennis Zink, technical manager at the Roaring Spring mill, which began operations in April 1866 and is one of the oldest continually running paper mills in the United States.

"Everything we produce is a form of specialty paper; at Roaring Spring it is carbonless and security paper, those are grades that require special expertise and equipment to produce," Appleton spokesman Bill Van Den Brandt said.

American Eagle Paper Mills, which began operations in September 2003 after the former Westvaco mill closed in October 2001 after more than 100 years of operation, today produces high quality recycled uncoated paper, focusing on envelope paper and offset printing paper.

"We are a recycling mill. This mill is as green as you can get as a paper mill," President John H. Ferner said. "All of our paper is at least 80 percent recycled material. It is environmentally friendly paper."

While Appleton distributes its products throughout North America and internationally, the bulk of American Eagle Paper Mills products remain close to home.

"MeadWestvaco is one of our largest customers. We ship the envelope paper to Williamsburg and Alexandria and the Conveo plant in Altoona. We sell offset paper to NPC Inc.," Ferner said. "Sixty percent of our products are sold in Pennsylvania."

The local mills produced a significant amount of paper and paid out good wages and taxes in 2009.

Appleton produced approximately 132,000 tons of paper products at the local mill in 2009. The mill, with a payroll of $30.5 million, paid approximately $91,000 in local property taxes and approximately $73,000 in sales and use tax to the state, Van Den Brandt said.

American Eagle Paper Mills, which turns out about 100,000 tons of products per year, had sales of $75 million in 2009. Outbound freight, with 95 percent local carriers, was $2,262,000 in 2009, Ferner said.

Last year, the mill paid wages and benefits of more than $11 million, $56,000 in property taxes, $120,000 in employee payroll taxes and $250,000 in Pennsylvania state withholding tax.

American Eagle Paper Mills purchased more than $5 million worth of local coal in 2009, had capital investments of more than $2 million and over the next 12 months plans to invest another $5 million, Ferner said.

Although the use of paper may decline in the future, mill officials remain optimistic about the future.

"Our focus is on lean manufacturing. Being a small specialty mill, we need to focus on eliminating waste and being as cost effective as possible," Van Den Brandt said. "Those are the challenges throughout the paper industry."

"Pending a further economic downturn and if the economy comes out of the recession, our business will remain stable," Zink said.

Ferner said his mill will begin to produce even more environmentally friendly products such as 100 percent recycled copy paper, and expects employment to remain steady at the Tyrone mill.