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‘It’s make or break’: East Millinocket mill to open Oct. 10

John Clarke Russ | BDN
John Clarke Russ | BDN
Richard Cyr, CEO of Great Northern Paper and senior vice president of Cate Street Capital and other company executives visited Great Northern Paper Company's East Millinocket mill to meet with the media Wednesday, Sept. 21, 2011.
By Nick Sambides Jr., BDN Staff

EAST MILLINOCKET, Maine — The new owners of the local paper mill toured the facility Wednesday for the first time since buying it last week and announced plans to start filling a full year of orders with 215 workers by Oct. 10.

With more than 500 job applications to review and an Oct. 30 deadline by which he needs his first order shipped, Great Northern Paper Co.’s new CEO said the mill would start ramping up next week. Mill managers will report to work Thursday and Friday. Another 50 workers eventually could be hired as other mill production resumes.

“It is a very short window. It puts a lot of pressure on everybody,” said Richard Cyr, a senior vice president at the mill’s parent company, Cate Street Capital of Portsmouth, N.H. “It’s make or break.”

“We are depending on the strength, conviction and ability of the region’s papermakers, their talent, to produce the paper,” he added. “Everyone will have to come together to make this work.”

In one of his biggest economic development coups, Gov. Paul LePage finished work begun by his predecessor when he announced late Friday that Cate Street had bought the East Millinocket and Millinocket mills in escrow for an undisclosed price from Brookfield Asset Management. A final mill sale is expected Sept. 27.

Acclaim greeted the news in the Katahdin region, which has had a 21 percent unemployment rate since the East Millinocket mill closed in April, idling 415 workers. Market conditions will dictate the reopening of the Millinocket mill, which closed and laid off 150 workers in September 2008. That mill’s restart is not expected for several months.

As Cate Street revitalizes its mills, the company began construction this week on a $275 million biomass boiler in Berlin, N.H., that will generate 75 megawatts of electricity in late 2013.

Maine state officials signed documents on Wednesday transferring to Cate Street most of the environmental permits issued originally to Brookfield, contingent on the state’s taking ownership of a landfill used by the mills and the financial liability of closure costs.

Cyr and company spokesman Scott Tranchemontagne only dropped hints about Cate Street’s long-term plans but elaborated on what drew them to the two sites.

An alternative energy company, Cate Street is studying starting torrefied wood manufacture at the Millinocket mill. The charcoaled wood chips burn at a 1-to-1 ratio with and could replace some of the coal burned in electricity plants to help those plants reduce their pollutants, Cyr said.

“It has zero [harmful] emissions, and it handles the same as coal,” Cyr said, calling torrefied wood manufacturing “as labor-intensive as the paper industry.”

“The similarities between them,” Cyr said, “are uncanny.”

Cate Street’s other subsidiaries purify industrial water and recycle plastic bottles. Those efforts and the production of torrefied wood would fit well within the mill sites with their easy access to industrial water, hydroelectric power, rail lines and the bountiful wood supply offered by the nearby Golden Road, said Tranchemontagne. He called torrefied wood the most likely second generation development in Millinocket.

Cate Street, Cyr said, seeks every possible use for its alternative energy technologies. Many are still under research or handled by other company workers, which Cyr and Tranchemontagne said made it difficult to discuss them in detail. Both also said they did not want to elevate expectations.

Paper is Great Northern’s first priority, Cyr said. The alternative energy plans would only complement the mills.

The Millinocket mill appears to need a $10 million to $14 million investment before it can restart, Cyr said. The company plans to use liquefied natural gas to fire the Millinocket mill until natural gas lines are installed in the next two or three years.

Cate Street’s need for wood in Berlin and at the Katahdin mills gives it enough bulk-buying power to make its paper manufacture extremely competitive, as indicated by the orders backlog and the financial backers helping the company restart the mills, Cyr said.

Of the $20 million to $25 million to be invested at East Millinocket, about $15 million will cover GNP’s startup costs. The rest likely will pay for improvements to the mill’s wood yard, Cyr said.

“We have a very solid plan to reopen the [East Millinocket] mill and build on the operations moving forward and maybe add some very cool technologies in Millinocket,” Tranchemontagne said. “It is a long-term vision of taking advantages of the synergies offered by that whole area.”

“That’s not to say that there won’t be hurdles to overcome, but we wouldn’t have gotten to this point if we didn’t have a solid plan,” he added.

Bangor Daily News writer Christopher Cousins contributed to this report.

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