http://www.pressherald.com/2014/08/14/old-town-pulp-mill-shuts-down-lays-off-180/
Closing of Maine mill sets back paper industry’s biofuel effort
The shutdown idles 180 employees at Old Town Fuel and Fiber, which other
pulp and paper companies hoped would be their model for producing butanol.
By J. Craig Anderson Staff Writer
Wednesday’s closure of the Old Town Fuel and Fiber mill is a setback for
the Maine pulp and paper industry’s efforts to break into biofuels
production, industry representatives said.
The mill, owned by New York-based private equity firm Patriarch
Partners, has ceased operations indefinitely and furloughed about 180
employees. While pulp remained the mill’s core business, it was the only
facility in Maine experimenting with the production of biofuel on a
commercial scale.
The company released a statement Wednesday evening announcing the
closure: “Effective immediately, all Old Town mill operations will be
indefinitely suspended. The impact of foreign competition and our
competitive position due to high wood and energy costs have made it
difficult to sustain operations at this time. All employees not needed
for securing the facility will be furloughed. During this idled period,
ownership will be pursuing options to secure the long-term viability of
the facility.”
John Williams, president of the Maine Pulp and Paper Association in
Augusta, said the news came as a surprise.
“Under the current ownership, I thought they were doing pretty well,”
Williams said.
Old Town’s pilot project to produce butanol from the cellulose in wood
fiber offered other mills “a lot of hope for the future,” and the
shutdown is likely to delay Maine’s foray into the growing biofuels
industry, he said.
The pulp and paper industry still employs 7,000 Mainers and is as
productive as ever, Williams said, but there is an understanding that
mills will have to diversify to remain viable.
“It’s an industry that is struggling,” he said.
In February, the Great Northern Paper Mill in East Millinocket shut down
and laid off 212 workers. The mill’s owner said the closure was a
temporary measure aimed at restructuring operations and lowering
production costs, but it has yet to reopen.
The mill in Old Town primarily produced wood pulp for the paper
manufacturing industry. It employed 195 people, of which 180 are being
furloughed, said Everett Deschenes, the mill’s director of market pulp
and fiber.
The Old Town mill had initiated a pilot program in 2008 to produce
“biobutanol,” supported by a $30 million grant from the U.S. Department
of Energy. The project was a collaboration with the University of Maine,
which has done extensive research on how to distill fuels from wood.
Butanol is a motor fuel that can be used in place of gasoline without
any engine modifications.
Bill Mayo, Old Town’s city manager, released a statement Thursday
morning thanking Lynn Tilton, founder and CEO of Patriarch Partners,
which bought the former Georgia-Pacific mill in November 2008 for $19
million. The private-equity firm manages a portfolio worth more than $8
billion, which includes a paper mill in Gorham, New Hampshire.
Mayo also thanked the mill’s employees.
“The city has faced this situation before and we will keep moving
forward,” Mayo said. “The city will work with the mill and state
officials to try and find a new buyer and keep Old Town moving forward
in a positive direction.”
In the meantime, the state Department of Labor said in a news release
that it has scheduled a program to help workers affected by the mill
closure.
“The department’s Rapid Response program assists workers facing job
losses due to downsizing or closures,” Gov. Paul LePage said in the
release. “The Rapid Response team is reaching out to help these workers.”
The session is scheduled for 2 p.m. Tuesday at USW Local 80, Union Hall,
at 354 Main St. in Old Town.
Williams said every paper mill job creates another three to five jobs in
related businesses. According to the Maine Forest Products Council,
forest products such as pulp and paper contribute $8 billion a year to
Maine’s economy – about $1 out of every $16 of the gross state product.
Additionally, Maine’s pulp and paper exports generate about $650 million
in revenue each year, the council said.
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