East Millinocket mill’s restart delayed a week

This shuttered paper mill in East Millinocket and the one in the Millinocket werepurchased by New Hampshire investor Cate Street Capital.
This shuttered paper mill in East Millinocket and the one in the Millinocket werepurchased by New Hampshire investor Cate Street Capital.
Posted Oct. 05, 2011, at 6:50 p.m.
Last modified Oct. 06, 2011, at 5:17 a.m.

EAST MILLINOCKET, Maine — Its plans to restart the local mill have been delayed by a week, but the parent company that owns the two Katahdin region paper mills will break ground on a $275 million biomass boiler in New Hampshire on Thursday, a company spokesman said Wednesday.

Under Cate Street Capital’s plan, the East Millinocket mill will open on or about Oct. 17 and ship its first order of virgin newsprint overseas by early November. The company had planned to restart the mill on Oct. 10, with its first shipment on the water by Oct. 30, but that has been delayed by a lack of available wood, Scott Tranchemontagne said.

“There is plenty of wood supply in the woods, obviously, but it has been very difficult to harvest wood because it has been so wet in Maine,” Tranchmontagne said Wednesday of the region’s recent heavy rainfall. “On the delivery side, we have been in constant communication with our clients and they have granted us some leeway.”

“This is not a long-term issue and it does not in any way jeopardize our plans for the mill,” he added. “It is a short-term issue that may delay us for a week or so.”

The boiler project parallels Cate Street Capital’s other significant recent investment in the two mills in intriguing ways, Tranchemontagne said.

“The [paper] mills in Berlin were very strong employers and economy drivers in New Hampshire for many years, so the return of this operation as a biomass boiler plant is very good news for that area,” Tranchemontagne said.

“That [boiler] will provide work for a lot of loggers, chippers and foresters. There is a lot of similarities between the regions of Berlin and Millinocket. In each case Cate Street is excited to be there and working very hard to ramp up both operations,” he said. “We are very busy, focusing as intently on building our mill operation in East Millinocket as we are on operating a biomass boiler New Hampshire. We have different teams working on each project. We also have some Cate Street people sharing resources between both projects.”

Gov. Paul LaPage announced on Sept. 16 that Cate Street had closed a sale in escrow with Brookfield Asset Management to buy the two Maine mills for an undisclosed price. A final sale closing occurred on Sept. 28. The East Millinocket mill will restart with 215 workers and might add another 50 to 75 workers as its recycling plant and other operations come online.

The Millinocket paper mill’s restart will be dictated by market conditions and won’t occur for several months.

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