Company looks into Katahdin plants

By Eric Russell, BDN Staff
Posted July 23, 2010, at 9:10 p.m.

Representatives of the Katahdin Paper Co. LLC mills in Millinocket and East Millinocket are hopeful that Lynn Tilton of Patriarch Partners can do for their mill what she has done for the former Georgia-Pacific facility in Old Town.

Tilton said this week that her company is seriously kicking the tires on the Katahdin Paper plants, but stressed that the process is still very much in its infancy.

“Patriarch has agreed to begin due diligence on the Katahdin mill based on their very positive experience with the project and workers in Old Town,” Tilton, founder and CEO of Patriarch Partners, said in a statement late Friday afternoon. “We are at the very early stages of exploration but know that any acquisition would require changes in product mix and machinery so we must ensure that any acquisition is economically feasible and the future viable.”

Duane Lugdon, international representative for Maine’s United Steelworkers Union, said the news that Patriarch Partners is interested has many millworkers excited.

“I know they are going to study the viability of buying the mills and making sure they would fit with their current product line, but they obviously would be welcome,” he said.

Lugdon said Tilton has told her that the mills are not viable in their current state and would need to be upgraded and retrofitted to produce high-end catalogs, magazines and high-gloss-grade paper. The cost of those upgrades would be part of Patriarch’s study.

The tandem mills are managed by the former Fraser Papers Inc., now known as Twin Rivers Paper Co., and owned by parent company Brookfield Asset Management of Toronto. The East Millinocket mill employs about 450 workers making directory-grade paper and newsprint. The Millinocket mill has been idle since Septem-ber 2008, when more than 200 employees were laid off.

Bill Manzer with Twin Rivers said the company has been discussing the possible sale of the two facilities for many months but he couldn’t comment on any negotiations. A representative for Brookfield did not a return a call for comment.

In the past, Brookfield has said it remains committed to reopening the Millinocket mill with a biomass burner. Company representatives are awaiting successful negotiation of a multiyear contract with the Maine Public Utilities Commission to buy surplus electricity from the boiler and the securing of a partner to run the biomass component.

Lugdon, however, said Brookfield has never been thought of as an engaged owner and that the paper mills are not part of the company’s long-term plans in Maine. He said he believed workers would welcome new ownership.

Patriarch Partners owns 74 companies nationwide, including the Old Town Fuel & Fiber facility, which the company bought in 2008 and promptly put 200 people back to work.

David Farmer, a spokesman for Gov. John Baldacci, said the governor’s office has been actively involved in trying to find a buyer for the Katahdin mills. Baldacci was involved in the deal to reopen the Old Town mill.

“We’ll work with any one potential buyer to help facilitate a deal,” Farmer said. printed on June 28, 2017