Thermogen seeks $30M loan for torrefied wood machine in Millinocket

Thermogen Industries, a subsidiary of Cate Street Capital, supplied a rendering of its proposed torrefied wood facility at the Katahdin Avenue paper mill site in Millinocket to the Town Council on April 25, 2012.
Courtesy of Thermogen Industries
Thermogen Industries, a subsidiary of Cate Street Capital, supplied a rendering of its proposed torrefied wood facility at the Katahdin Avenue paper mill site in Millinocket to the Town Council on April 25, 2012.
By Nick Sambides Jr., BDN Staff
Posted June 12, 2013, at 1:07 p.m.

MILLINOCKET, Maine — The Finance Authority of Maine has begun reviewing Thermogen Industries One LLC’s application for a $30 million bond to build New England’s first torrefied wood machine at the Katahdin Avenue paper mill site, officials said Wednesday.

The application came in on Tuesday afternoon. The review should take two or three months, said Beth Bordowitz, CEO of FAME, the state’s business finance agency.

“There are a lot of pieces to this application,” Bordowitz said Wednesday. “I am sure we will have some back-and-forth negotiations with the [bonding agency].”

“The parent company [of Thermogen], Cate Street, is a highly professional organization, and very responsive to work with,” she added.

Company spokesman Scott Tranchemontagne said that Thermogen was pleased to be “exploring a partnership with FAME that would help Thermogen Industries move forward in Millinocket and ultimately create or support several hundred new jobs in the Katahdin Region.”

“We have partnered successfully in the past, to reopen the Great Northern Paper Mill in East Millinocket and put more than 255 workers back on the job. We respect FAME’s mission and process and look forward to the application process,” he added in a brief statement.

Peggy Daigle, Millinocket’s town manager, did not immediately respond to requests for comment on Wednesday.

Cate Street, a New Hampshire investment company, owns paper mills in East Millinocket and Millinocket through the new Great Northern Paper Co. LLC. Another company subsidiary, Thermogen was established to manufacture torrefied wood, a type of wood pellet, in Millinocket and Eastport for sale to British and European coal-fired electrical plants.

The loan application concerns only the Millinocket effort, Bordowitz and Tranchemontagne said.

It is “too early to say” whether the proposed Eastport facility would need a similar loan. Thermogen’s application followed FAME’s timeline and application process, he said.

Tranchemontagne has said the first torrefied wood machine is one of five slated for Millinocket. Two or three more will be built in Eastport over the next several years, with the first Eastport machine coming online sometime in 2015.

The first machine in Millinocket will directly employ 30 to 35 workers and create or sustain 80 to 100 jobs indirectly, he said. Each machine after will employ 20 to 25 directly with 80 to 100 jobs indirectly benefiting.

Prep work for the first torrefied wood machine began at the site began in November. The demolition of several buildings, the first step toward creating an accompanying industrial park, began in March.

But Cate Street has had recent troubles. The company announced in October 2011 that its Millinocket torrefied wood machine would be installed by late 2012. Company officials later pushed that date back to April 2013, but have yet to announce a construction start date.

Cate Street officials also confirmed in late April that GNP was behind in some payments to creditors because of higher than anticipated wood costs.

http://bangordailynews.com/2013/06/12/business/thermogen-seeks-30-million-loan-for-torrefied-wood-machine-in-millinocket/ printed on August 21, 2014