Port of Eastport set to spend $6.5M in expansion

Dwarfed by the large cargo ship Star Japan, tractor trailers were lined up on the pier at the port of Eastport Tuesday, Feb. 23, 2010, filling the ship with pulp manufactured at Domtar in Baileyville. Using a combination and state and federal funding, the port is diversifying its shipping abilities in an effort to secure its future. (Bangor Daily News/ Sharon Kiley Mack)
Dwarfed by the large cargo ship Star Japan, tractor trailers were lined up on the pier at the port of Eastport Tuesday, Feb. 23, 2010, filling the ship with pulp manufactured at Domtar in Baileyville. Using a combination and state and federal funding, the port is diversifying its shipping abilities in an effort to secure its future. (Bangor Daily News/ Sharon Kiley Mack)
By Sharon Kiley Mack, BDN Staff
Posted Feb. 26, 2010, at 10:22 p.m.

EASTPORT, Maine — With the infusion of $4.5 million in state transportation bonds and another $2 million in federal stimulus money, the port of Eastport is poised to diversify itself — a move that officials say will secure its future.

Right now, the port’s only customer is Domtar, a paper mill in Baileyville that sends pulp all over the world.

But soon — with the possible siting of two new facilities in Washington County, one that would produce wood chips and a second that would manufacture wood pellets — the port might no longer have all of its eggs in one basket.

“We must diversify to survive,” Chris Gardner, executive director of the Eastport Port Authority, said this week. “When Domtar closed [temporarily last year], it drove it home that we were overleveraged.”

“We knew it,” added Roland “Skip” Rogers, general manager of Federal Marine Terminals, which runs the port. “It was a sort of perfect storm of events and we needed to grab the ball and run.”

Using the $6.5 million in state and federal funding, the port will construct a bulk cargo conveyor system, a 5-acre outdoor storage area and a major warehouse — projects that will allow it to serve industries beyond the pulp market.

“This is the second largest investment ever in this port,” Gardner said, “second only to its construction.”

Meanwhile, the two men said, companies from all over the world have been sending representatives to Eastport to look at the port and surrounding area, proving that the expansion project’s timing couldn’t be better.

“A brokerage representative from London flew in last week, and next week a Texas company rep is flying up to negotiate regarding a wood pellet facility,” Gardner said.

Negotiations for another pellet facility and a chip mill are going on, and Gardner and Rogers could not provide details while those are still under way.

But, Gardner said, “The point is companies are lining up. We will have the storage, the infrastructure, and you can’t duplicate this water.”

Carved by glaciers, the port of Eastport in Broad Cove is the deepest natural seaport in the continental United States. At mean low water — the lowest level — the water is still 64 feet deep at the pier.

“This is one of the most cost-effective ports in the state,” Gardner said, partly because there are no dredging costs. “We have zero environmental impacts.”

The port authority was created by state statute and is owned by the city of Eastport. It is managed by an elected board of directors. Every investment in the port has returned a dividend, Gardner said.

“If we are able to secure these new businesses, we can double the port’s tonnage and secure the port’s future,” he said.

Today, the average annual amount of cargo that comes through Eastport is 380,000 tons — all of it exported. Nothing is imported.

“We are a significant port,” Gardner said. “When we first built [the existing pier and terminal in 1998], the best guess was that it would handle about 50,000 tons.”

Rogers and Gardner said that every time there has been growth at the port, it has directly followed investments. “Money means growth,” Gardner said. “We will take this $6.5 million investment and again show the state we can succeed.”

“This will very quickly show dividends,” Rogers said. “We are already getting worldwide inquiries. People are now looking to locate manufacturing facilities here because they can ship their product out to global markets.”

Although the port applied for and did not obtain a $57 million federal stimulus grant for a rail connection, that project is far from dead in the water.

“The competition was fierce,” Rogers said, noting that there were $58 billion worth of applications competing for $1.5 billion in funding. Gardner said the railroad left Eastport in the 1970s, decades before the port infrastructure was created. But providing rail service to the port would eliminate one of its biggest obstacles: con-nectivity.

“There are many naysayers that called this plan ‘the railroad to nowhere,’” Gardner said. “I look forward to proving them wrong.”

Gardner said that when the port was moved from downtown to Broad Cove in 1998, it lost visibility in the community and perhaps some appreciation by townspeople for the economic role it plays.

But he stressed the vital role that the port plays.

“We are shipping internationally and bringing foreign money back into the U.S.,” he said. “I see this port as one of the best assets in Washington County. It has repeatedly shown great dividends, and every time someone sees one of these massive ships making their way into the port, they should see dollar signs.”

http://bangordailynews.com/2010/02/26/business/port-of-eastport-set-to-spend-65m-in-expansion/ printed on July 10, 2014