Lincoln Paper and Tissue in Maine to spend US$7.8M for tissue production upgrade by early 2015, helped by recent US$1M grant from Efficiency Maine to retrofit older pulp refining equipment and save energy; mill's tissue machines still running full out

Debra Garcia

LINCOLN, Maine , April 24, 2014 (Bangor Daily News) – Lincoln Paper and Tissue LLC's plan to improve its energy efficiency by spending $7.8 million to retrofit its tissue production line will also result in some layoffs, a company official said Wednesday.

Coming in response to an explosion last November that destroyed the mill's ability to manufacture pulp, the plan will result in a workplace that is "likely going to require fewer people," said mill co-owner Keith Van Scotter, whose factory employs approximately 190 workers.

"It's going to be a few," Van Scotter said of the layoffs. "The big driver is not [reducing] head count, but there will be some."

He said he didn't have a specific number of layoffs available or know when they would occur, but said the work would likely be finished by early next year. Efficiency Maine recently bolstered the plan with a $1 million grant.

A smelt water explosion in a chemical recovery boiler on Nov. 2 forced the layoff of about 200 Lincoln Paper and Tissue LLC workers about a month later, but in a federal petition for retraining funding for the displaced workers the company revealed that the layoffs were also due to the loss of a major customer that was moving its tissue production to Indonesia.

The explosion idled one of the company's paper machines and its pulping facilities, forcing the company to purchase pulp off-site. The layoffs represented about half the company's workforce.

The company's three tissue machines continue to run nonstop, officials have said. It is Maine's sole tissue producer.

An independent trust dedicated to promoting the efficient and cost-effective use of energy to save money for Maine residents and businesses and increase employment, Efficiency Maine contributed a $1 million incentive to help Lincoln Paper retrofit its older and less efficient pulp refining equipment.

This machinery prepares the dried pulp for use in its newer specialty tissue machines, said Paul Badeau, director of communications for Efficiency Maine.

The upgrades will save 5.8 million kilowatt hours a year, enough energy to power about 915 homes. The total project cost is estimated at $2.8 million and is part of an overall $7.8 million facility upgrade to improve the logistics of the mill's new business model, Badeau said.

Efficiency Maine approved the funding for the company a few weeks ago, Badeau said.

Lincoln Paper and Tissue produces an estimated 200 tons of tissue a day, he said.

Efficiency Maine was pleased to help improve Lincoln Paper's chances for long-term viability, said Ian Burnes, program manager for strategic initiatives.

"The mill has faced difficult challenges head-on this year with foresight and creativity, and we are gratified to see that Efficiency Maine's incentive helped management choose an energy upgrade that will keep manufacturing and jobs here in Maine," Burnes said. "With Efficiency Maine's incentive, we are able to leverage the mill's commitment, and secure substantial energy savings."

Efficiency Maine's Large Customer Program, from which the money will come, is designed to leverage private investment to achieve significant electrical savings. Funding levels range from a minimum of $100,000 to a maximum of $2 million per facility or up to half of the total project costs. Typical customers of the program include hospitals, manufacturers, commercial bakeries, food processors, office complexes and data centers, Badeau said.

Much of the upgrade will involve redesigning the mill's workflow, Van Scotter said.

The company is also due to benefit from being the first customer to use a $7.5 million natural-gas pipeline being run into Lincoln. Bangor Gas Co. officials hope to finish line installation by late summer.

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