Cate Street plans industrial park at Millinocket paper mill site

MILLINOCKET, Maine — The New Hampshire-based investor that purchased two Katahdin region paper mills in September announced plans Wednesday to turn the Millinocket site into an industrial park and launch a national marketing campaign to draw industry to the region.

Leaders from Cate Street Capital of Portsmouth met in executive session with the Town Council for about an hour on Wednesday and unveiled renderings of the first $35 million torrefied wood manufacturing machine they plan to build at their industrial park, the site of the Katahdin Avenue paper mill. They also announced what they called “an aggressive, national marketing campaign to manufacturers in an attempt to bring new jobs and economic vitality to the Katahdin region” through the new park.

The meeting wasn’t all good news. Company officials who are working with state officials to permit the torrefied wood machine said they expect to have it operational in the third quarter of 2013, almost a year behind their original schedule. They had originally wanted the plant operational in November, then pushed back the operating date to first-quarter 2013.

Councilors and Town Manager Eugene Conlogue declined to comment on the meeting, saying they wanted time to consider what they had heard.

Cate Street subsidiary Thermogen Industries LLC announced on Dec. 1 that for $20 million it had secured exclusive rights from Scotland-based Rotawave Biocoal to manufacture a type of machine — called the Targeted Intelligent Energy System, or TIES — that makes torrefied wood intended to replace coal burned at electricity plants.

Creating jobs for 22 to 25 workers directly and dozens of truckers, loggers and other support providers indirectly, the first $35 million TIES machine would supply United Kingdom utilities with biocoal, so nicknamed because it is made of wood but burns at a nearly 1-to-1 ratio with coal, company officials have said.

And while East Millinocket’s paper mill has been running steadily since October, with 225 workers, Millinocket’s mill won’t be restarting anytime soon, Cate Street officials said.

“We have consistently said that without a natural gas line to provide stable, affordable energy, the Millinocket paper mill cannot restart,” Cate Street Chief Operating Officer Richard Cyr said in a statement Wednesday. “While all parties remain committed and are diligently working towards bringing natural gas to the area, its future is still unclear.”

“At best, it is almost two years from operation,” Cyr added. “In light of this reality, and the shrinking market for the type of paper produced at the Millinocket mill, we owe it to the community, the many unemployed Katahdin region workers and our own employees, to actively explore other ways to revitalize the Millinocket site. Launching Thermogen Industries is a great start. Recruiting additional manufacturers to co-locate is a natural next step that will reap long-term benefits.”

Adrienne Bennett, Gov. Paul LePage’s spokeswoman, did not immediately respond to requests for comment on the timeline on the pipeline’s installation.

LePage announced on Sept. 17 that the Portsmouth, N.H.-based Cate Street had purchased the Millinocket and East Millinocket paper mills for undisclosed terms. The deal was completed on Sept. 28 and the East Millinocket mill restarted on Oct. 17 making the mill’s primary products: newsprint and telephone directory paper.

LePage has made expanding Maine’s natural-gas use a cornerstone of his economic development plans and his administration is helping natural gas suppliers and Maine businesses prepare to run a branch line, with 6- to 8-inch pipe, about 60 or 70 miles from the Old Town area through Lincoln and into the Katahdin region, where it would supply the two Great Northern Paper Co. mills, officials have said.

Private investors would build the branch sometime in 2013, state officials have said.

As part of the industrial park proposal, Cate Street plans to offer the mill site’s several empty buildings for little or no rent and said the site offers great advantages to manufacturers besides the pipeline. They include:

• Access to low-cost electricity and potential access to excess steam and heat.

• Direct access to the Golden Road, Maine’s primary road into one of the largest contiguous working forests in the U.S., as well as direct access to road, rail and the Penobscot River.

• Access to several deepwater ports, including Searsport, for overseas shipping.

• State tax incentives and grant programs for the creation of jobs and long-term business growth, including Pine Tree Development Zone tax exemptions, work force training and Community Development Block Grant funding.

“Today was an opportunity to begin the discussion with community leaders and ask them for input as we all try to lift up the region for the long term. We are very respectful of Millinocket’s history and tradition and are working hard to preserve it,” Cyr said. “We believe the responsible course of action, for all parties, is to explore every opportunity and be open to new ideas.”