Great Northern Paper to produce 500,000 tons/year torrefied wood as coal substitute at Millinocket, East Millinocket mills in Maine as early as 2013, creating 220 new jobs

Kendall Sinclair

EAST MILLINOCKET, Maine , October 24, 2011 (Bangor Daily News) – Gov. Paul LePage heralded the revival of the Main Street paper mill on Monday as its owners announced plans to hire another 220 workers when they start to make torrefied wood, a coal substitute, there and at the Millinocket mill as early as 2013.

Standing among huge rolls of finished newsprint destined for a Connecticut newspaper, LePage complimented Cate Street Capital of Portsmouth, N.H., for creating the new Great Northern Paper Co. as company officials discussed their ambitious plans to produce 500,000 tons of torrefied wood between the East Millinocket and Millinocket paper mill sites annually.

“I wanted to thank the company and its workers,” LePage said during brief remarks he made while standing on a train loading dock. “They have done everything to make this successful.”

After getting previous owner Brookfield Asset Management of Toronto to twice extend the mills’ decommissioning deadlines, LePage on Sept. 16 announced the sale in escrow of the two paper mills to Cate Street. The sale closed later that month and the East Millinocket mill began producing newsprint on Oct. 17 for a European customer.

The company’s workers already had accepted contracts that made them the state’s lowest-paid papermakers and the host towns had agreed to drastically reduced property tax deals with Cate Street.

The East Millinocket plant has enough orders to fill a year, company officials have said. As was apparent from the loading dock, the company has acquired several customers. Its workers are very pleased to be back on the job, said Rod Nicholson, supervisor of the mill’s pulp machine.

“It’s like the whole area is happier,” Nicholson said.

The revival of the Great Northern Paper Co. mill in East Millinocket and the hiring of its 215 workers are but a first step, said John Halle, president and CEO of Cate Street.

The company hopes to restart the Millinocket mill’s production of glossy supercalendered paper, hiring 100 workers there if market conditions permit, and its engineers are designing one of five torrefied wood-producing machines that would be placed in Millinocket and at the GNP facility in East Millinocket in late 2012 — if all goes well, Halle said.

The design of a second machine will begin in February. The company would need six months after the machines’ installations to ramp up to full production. Each machine would employ 24 people, not counting the loggers needed to supply wood, truckers to deliver finished product and more workers employed in other support capacities, Halle said.

Five to seven jobs would be created by every torrefied wood manufacturing job, Halle estimated — a ratio similar to that created by papermaking jobs.

Used as a coal substitute at electricity plants in Europe, the United Kingdom and Canada and just beginning to be used in that capacity in the U.S., torrefied wood resembles wood pellets except that it burns at a one-to-one ratio with coal and lacks coal’s pollutants.

The torrefaction facilities would be New England’s first, Halle said.

Cate Street officials believe they can crack the overseas markets and that tightening American federal air-quality regulations will make torrefied wood a necessary replacement for coal at many U.S. plants, Halle said.

The company’s intent, to produce torrefied wood in the Katahdin region, remains firm. The mills’ locations, transportation systems, energy supply and work force suit the company’s needs quite well, Halle said.

However, several factors — including state and federal permitting, machine design requirements and the company’s continued study of the feasibility of its torrefied wood plans — could significantly delay the timelines of its torrefied wood schedule, company spokesman Scott Tranchemontagne said.

“The timing is very fluid at this stage,” Tranchemontagne said.

LePage discussed another timeline Cate Street wants to see fulfilled: the installation of natural gas lines at the mills in two years. As tentatively planned by state officials, the Lincoln Paper & Tissue Co. mill also would get a pipeline connection, as would several other manufacturers in the Katahdin and Lincoln Lakes regions, LePage said.

“It would be a major, major factor in several areas,” LePage said. “It would take enormous pressure off their energy costs. That would create more profit and salary opportunities for their workers, create more opportunities for reinvestment in their facilities, and would allow them greater savings from efficiencies.”

The gas lines could cut heating costs for businesses and residents by a third, LePage said. The pipeline, he said, needs anchor businesses — large manufacturers such as Great Northern Paper and Lincoln Paper & Tissue — to make it viable.

In the meantime, GNP will continue to produce newsprint and Katahdin region officials will work to build the area’s economy. In September, the region had a 20.4 percent unemployment rate, Maine Department of Labor statistics show.

The state’s unemployment rate for September was 7.5 percent; nationally, it was 9.1 percent. Since the East Millinocket mill closed in April, leaving 415 workers without jobs, the unemployment rate had hovered just under 22 percent.

“We still have a lot more jobs to get back here,” said Mark Scally, chairman of the town’s Board of Selectmen, calling the paper mill’s revitalization “a start.”

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