Fraser Papers Inc. is laying off 100 workers and dropping production at its Madawaska mill in response to weakened demand for its paper.

The Canadian-owned company is taking its No. 6 machine offline indefinitely as of today, the Bangor Daily News reported. The layoffs will reduce the mill's work force to about 622 employees, and drive the area's unemployment rate to about 13.2% from the current 9.7%. The company also may cut nearly half of the 450 workers at its operations in nearby Edmundston, New Brunswick, unless it can stem recent financial losses.

Fraser recently reported a $16.7 million first-quarter loss, growing debt of $25 million and significant pension obligations, the paper reported.