Katahdin business owner wants to buy region’s mills

Posted July 05, 2011, at 1:18 p.m.
Last modified July 05, 2011, at 6:35 p.m.
Galen Hale
Courtesy of Galen Hale
Galen Hale

EAST MILLINOCKET, Maine — A local businessman who already owns a retail stove and alternative fuels store and is part owner of a scrap metal business wants to be the next owner of the two Katahdin region paper mills, he said Tuesday.

Galen Hale of Millinocket said that he has been “tentatively assured” of enough start-up capital to get the East Millinocket paper mill operational if his due diligence review of the mill passes muster and that he envisions no national unions at either mill.

Hale said he had contacted the Maine Department of Economic and Community Development’s forest products adviser, Rosaire Pelletier, a holdover from Gov. John Baldacci’s tenure who has stayed on with Gov. Paul LePage’s administration to help revitalize the East Millinocket and Millinocket mills, but has not gotten very far.

“In all fairness, Mr. Pelletier was willing to talk,” Hale said Tuesday. “However, given his prior connection with the sellers and another of the potential buyers I felt there may be a conflict of interest. I asked him to please get me in touch with someone else in the governor’s office. To this date that has not happened.”

Adrienne Bennett, the governor’s spokeswoman, declined to comment Tuesday on the state’s mill sales efforts, saying that such matters are kept confidential. LePage has said that the state has until July 31 to find a buyer or the mills’ owner, Brookfield Asset Management Co., would start decommissioning them.

An executive of Brookfield told the Bangor Daily News on June 14 that International Grand Investors Corp. of Delaware, owners of a mill in Baileyville, was interested in buying the mills for $1.

Rep. Herbert Clark, D-Millinocket, and Millinocket Town Manager Eugene Conlogue told the Millinocket Town Council during its meeting on June 25 that the potential deal had run into several snags. Clark identified one: a lack of wood in the area to make the purchase agreeable. Others in the industry said the area’s wood supply was plentiful, but perhaps not at a price the corporation was seeking.

On Tuesday, Mark Scally, chairman of East Millinocket’s Board of Selectmen, said town officials have heard from state leaders that negotiations with “some interested parties” are progressing. Clark could not be reached for comment, and Conlogue is on vacation this week.

Scally said he welcomes Hale’s efforts to buy the mills.

“I have always maintained if we are going to pick ourselves up, we will do it by our own bootstraps. I don’t think it’s far-fetched. If indeed he wants to try it, let him go for it,” Scally said Tuesday. “If he has an idea, let’s give him a chance.”

A Millinocket resident, the 62-year-old Hale is one of the owners of a scrap metal recovery business in East Millinocket, East Mill Metal and Salvage LLC, which his sons operate, in addition to a Medway retail stove and alternative fuels store, Nicatou Stoves.

Hale has nothing like the deep pockets of Brookfield, which describes itself as a global asset manager with approximately $150 billion in assets, or IGIC, a Hong Kong-based investor, which purchased the former Domtar pulp mill in Baileyville for $64 million last September.

But Hale has operated Nicatou for nine years, and has 31 years of experience as a papermaker at the Millinocket and East Millinocket mills. He served 23 years as a U.S. Navy serviceman and reservist, having retired as a petty officer, first class. He also built Hale Street in Medway at age 30, he said.

His family has been in Medway since 1833, and his older sons also have built careers while working for Hale Family Business LLC, the parent company of the family’s financial interests.

One son, Galen F. Hale, is an environmental engineer for the Maine Department of Transportation. Greg Hale is Medway’s Public Works Department director. Greylen Hale is a firefighter-EMT with the East Millinocket Fire Department who also works at Lincoln Paper & Tissue LLC. The elder Hale’s youngest son, Nathan, is a sophomore at Schenck High School of East Millinocket.

Since its launch in August 2010, East Mill Metal and Salvage has grown to employ five full-time workers and purchased a $25,000 loader truck and a retired ambulance that was converted to a service truck. It also purchased three welding machines and two plasma cutters to add a fabrication and welding shop since May 1, Greylen Hale said.

“The business is going good,” Greylen Hale said. “Our guys are always busy and the company is making money. We hope to create five more jobs there next year. My goal was 10 jobs in a two-year period. We have been open a year and we’re halfway there.”

If he becomes the mills’ owner, the elder Galen Hale would consider it the challenge of his life, but he said believes he could make a go of it.

His plan would be to restart the East Millinocket mills’ No. 6 paper machine, which would employ 100 workers; optimize the mill’s steam and power production; and then restart the steam facilities in Millinocket, he said. It would take four to six months to restart No. 6, he said.

Restarting East Millinocket’s No. 5 paper machine would be next, with the possible restart of Millinocket’s No. 11 machine — if feasible — after that, he said. A former union president, Hale said he would welcome workers as independents or as members of their own standalone union, with profit-sharing and production bonuses, but would rather not deal with national or international unions, to make his mills as much of a family operation as possible.

“I think I know the people that I need in place to make this happen. I will surround myself with people that know what needs to be done in that paper mill,” Hale said. “I will be bringing back people who know what they have to do to make this work.”

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