State, owner ‘haven’t given up hope’ on Millinocket mill

Posted Jan. 25, 2013, at 3:02 p.m.

MILLINOCKET, Maine – The New Hampshire-based owner of the Katahdin Avenue paper mill is working with state officials to find an operator for the dormant No. 11 paper machine and lease mill office space, officials said Friday.

Rosaire Pelletier, forest products industry liaison at the Maine Department of Economic and Community Development, is talking weekly with Cate Street Capital investment company officials regarding potential operators, officials said.

Cate Street maintains its hope of eventually restarting the mill when market conditions permit, company spokesman Scott Tranchemontagne said. But the company is working with Pelletier to find a nontraditional operator who can find alternative markets for the mill’s products and restart it sooner, Pelletier said.

“We still haven’t given up hope on No. 11,” Pelletier said Friday. “Right now there is no market for that machine’s paper, since the mill started in Nova Scotia that got so much support from the Canadian government.”

“It is more about trying to find out what [interest in the mill] is out there. They [Cate Street] could be part of it or not. I am not looking for any buyers right now. It is their machine,” Pelletier said.

First delivered to the Town Council on Thursday in a report from interim Town Manager Charles Pray, the news of the No. 11 machine is the first issued by Cate Street since the company bought the Millinocket and East Millinocket paper mills in September 2011.

The East Millinocket mill was restarted within a few weeks of the purchase and now employs about 360 people, but the Millinocket mill has remained dormant. Besides the shrinking of the market it serves, the mill’s papermaking processes are still largely powered by No. 2 heating oil.

The high cost of that fuel was the primary reason Cate Street’s predecessor, Brookfield Asset Management, shut down the mill in September 2008, idling about 208 workers.

Brookfield claimed investments of $57 million in the mill from 2004 to 2008.

Cate Street and Pelletier have been working together for about a year, Tranchemontagne said. Their efforts came to light after Pray contacted Cate Street officials for an update on the mill and Cate Street’s efforts to launch a torrefied wood facility on the mill property and an industrial park.

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