PaperAge Magazine

ND Paper to Buy Pulp Mill in Old Town, Maine, Restart Expected in Q1 2019

Old Town pulp mill in Maine After a series of phased capital investments, ND Paper expects the Old Town Mill will restart in the first quarter of 2019 and ultimately produce 275,000 admt annually of unbleached kraft pulp.

Oct. 11, 2018 - ND Paper LLC on Oct. 10 announced that it has entered into a definitive asset purchase agreement with OTM Holdings, LLC pursuant to which ND Paper will acquire the Seller's bleached kraft pulp mill, plus approximately 100 acres of real property, located in Old Town, Maine for an undisclosed sum, payable in cash.

The Old Town Mill was idled at the end of December 2015 by then-owner Expera Specialty Solutions. In 2016, Expera sold the mill to MFGR, a joint venture comprised of Gordon Brothers, Capital Recovery Group (CRG), Rabin Worldwide and PPL Group. MFGR then sold the mill to OTM Holdings in February 2018.

Prior to its idling, the Old Town Mill produced approximately 155,000 air dried metric tonnes (admt) per year of bleached hardwood kraft pulp.

According to ND Paper, the mill will be reconfigured to operate at substantially lower manufacturing costs than when it was last operational. This will be achieved by three primary tactics:

  • First, with abundant local availability of softwood, ND Paper intends to move the production mix from hardwood kraft to softwood kraft pulp.
  • Second, by eliminating bleaching operations and focusing on unbleached softwood pulp, the Mill will increase its production rates and lower variable input costs.
  • Finally, the mill will share several management and administrative functions with ND Paper's Rumford Division, lowering overall overhead costs.

After a series of phased capital investments, ND Paper expects the Old Town Mill will restart in the first quarter of 2019 and ultimately produce 275,000 admt annually of unbleached kraft pulp.

“We are absolutely thrilled to restart the Old Town Mill and return well over 100 high-paying jobs to Penobscot County,” said Ken Liu, CEO of ND Paper. “By leveraging our existing manufacturing platform in Maine, combined with the financial capacity to wisely invest in the mill's production capabilities, we expect to create a very strong future for this facility.

“Also, similar to our other recent acquisition announcement in West Virginia, this transaction supports Nine Dragons' company-wide fiber sourcing requirements and global growth initiatives,” Liu added.

ND Paper expects to complete this transaction in the next thirty days, subject to customary closing conditions and approvals.

ND Paper is a wholly-owned subsidiary of Nine Dragons Paper (Holdings) Limited, the largest containerboard producer in China and Asia, and a leading paper product manufacturer globally. ND Paper manufactures and distributes various types of pulp, paper and paper-based packaging materials. Its mills in Rumford, Maine and Biron, Wisconsin are fully-integrated paper and pulp mills with approximately 1,000 employees and the capacity to produce 900,000 metric tons of pulp and paper annually. To learn more, please visit us.ndpaper.com.

SOURCE: ND Paper LLC and archived news reports