March 14, 2014






Mill’s two tissue machines to create 80 jobs
by Lora Whelan


     Baileyville's Woodland Pulp mill will have from 60 to 80 new employees by the end of the first quarter of 2016 because of a planned expansion by owner International Grand Investment Corp (IGIC). Currently the mill employs a little over 300 people. IGIC's subsidiary, St. Croix Tissue Inc., will purchase, own and run two new tissue machines at the mill. Tissue machines create a product that is used to make paper towels, napkins, bathroom tissue and more.
     IGIC/Woodland Pulp CEO A.K. Argawal was on hand at a March 12 press conference held at the mill and explained that the expansion offers "benefits of integration." The wet pulp from the mill will have no transportation costs as it makes its way to the tissue machines. There the pulp will be made into 90" diameter rolls on machines that spin 5,000 to 6,000 feet per minute, enough that if unrolled would create a mile‑long trail. While that sounds like a lot of product, Argawal noted that it would be about 30% of the mill's total output. He expects the tissue to go directly to domestic markets by trucks and down the road possibly by rail. The creation of tissue will not increase the demand for raw materials, he said.
     Currently about 30% of the mill's production goes to the domestic market, and the remaining 70% is exported overseas, with export happening primarily through the Port of Eastport. Argawal did not expect that to change with the move toward making tissue. Rather, he noted, the integration of tissue machines into the mill will give the company a leg up in selling its products.
     The Port of Eastport depends heavily on the Woodland Pulp mill, and any changes are watched carefully. Port Director Chris Gardner says of the expansion plans, "I think the number one step to think of is that the long‑term security of the port depends on the long‑term stability of that mill. Anything that happens that lends to the mill's stability is a positive to Eastport." He adds that the port and the mill have worked well together over the years, and he fully expects the good relationship to continue.
     The two tissue machines represent a $120 million investment. Along with the 60 to 80 direct jobs, the company expects that another 200 to 300 indirect jobs will be created. Bert Martin, director of Woodland Pulp, explained that the indirect jobs might include drivers for an additional 80 trucks used to transport the tissue rolls, or people employed to construct the mill's expansion, or to maintain the machines. "There are a whole lot of benefits" to the regional economy, said Martin. The first machine will be installed the fourth quarter of 2015, with the second to follow in early 2016.
     Such specialized equipment will require matching skill sets. Martin stated that, when the time for hiring comes, the company will be "looking for the best and brightest." The machines run fast and are top‑of‑the‑line equipment. Employees will "have to be on the ball if something happens." An extensive search will be held. "We can't just take anyone." Training will take at least six months. Rigorous testing will take place, with oversight by the Department of Labor because of federal New Market Tax Credit requirements, a financing mechanism IGIC utilized through the creation of St. Croix Tissue. The company fully expects that some employees will relocate to the region. "We hope to pull in some people" and build the community, Martin stressed.
     "This is a major investment in the paper industry, the kind that has not been seen in Maine for decades," said Governor LePage in a prepared statement. "This is tremendous news for our neighbors Downeast, providing them new opportunities for good‑paying, full‑time jobs in a growing industry. The tissue market is strong, and the investment by IGIC will stabilize the future of the mill."
     Martin noted that the nearest competition for tissue manufacturing is in upstate New York and Quebec, with a smaller facility in Connecticut. Lincoln Paper and Tissue in Maine manufactures a specialized tissue product that would not be a competitor.
     The new investment is the result of more than two years' worth of discussions, planning and negotiations between IGIC and the LePage administration. Governor LePage met the owners of IGIC in China during a trade mission in 2012. New Market Tax Credits (NMTC) from the federal and Maine state governments were critical to the investment. The Finance Authority of Maine issues NMTC for the state program and notes in its November 2013 meeting minutes that three entities had applied under the New Markets Capital Investment Program for certification of approximately $40 million in tax credit eligible investments in St. Croix Tissue Inc. The NMTC Program was established by Congress in 2000 to attract investment capital to low‑income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax return in exchange for making equity investments. The investment makes possible the St. Croix Tissue purchase of equipment that is "the best in the world," said Argawal.
     In a prepared statement, State Senator David Burns applauded the decision by IGIC to expand its operations at the new St. Croix Tissue in Baileyville. Burns said, "What strikes me the most is that this marks the company's long‑term commitment to the area. It also represents a large‑scale investment in the paper industry that hasn't been seen in Maine in decades. I believe this is an indication of the strength of the tissue market that will bring stability to the Baileyville mill."
     LePage stated, "Government does not create jobs, but it can create an environment where businesses can thrive. As I often say, investment capital goes where it is welcome and stays where it is appreciated. We welcome IGIC to Maine, and we appreciate their business."
     Local officials were just as enthusiastic. Baileyville Town Manager Rick Bronson was at the press conference held at the mill and told the company officials, "We are very glad you're here and very glad you're doing this." A representative from the nearby community of Princeton said, "A lot of people in Princeton work in the mill. We appreciate it."

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