Proposed newsprint mill to deliver 335,000 tons per year of newsprint capacity to the market.

Construction is scheduled to begin this summer on Besicorp-Empire's new newsprint mill and power plant in Rensselaer, N.Y. When started up in 2007, the single-line mill will have the capacity to produce 335,000 metric tpy of 100% recycled newsprint, consuming some 400,000 metric tpy of ONP and post-consumer magazines.

A joint venture between Besicorp Development Co. and Empire State Newsprint, the new mill will have a state-of-the art deinking plant and newsprint machine. ONP and recovered magazine fiber received by truck and rail will be stored in a large receiving warehouse and metered into the recycling process. Rolls of newsprint will be inventoried in a finished product warehouse before shipment to printers in the region.

A water treatment facility will prepare water taken from the Hudson River for use in the mill's processes. The plant will also have a waste treatment side to clean the mill's effluent streams before discharge back into the river.

The centerpiece of the power project is a highly efficient combined cycle cogeneration plant fueled by natural gas (with limited use of oil as a secondary fuel), producing a nominal 505 MW of electricity. It will help meet New York's projected need for an additional 5,000-7,000 MW of electrical generation capacity to prevent future power brownouts and blackouts. The environmentally efficient combined cycle process will also help reduce NOx and SO2 air emissions both regionally and in New York State.

EPC for the project is being handled by KSH Solutions., a subsidiary of RWE. KSH, Montreal, Quebec. Jakko Poyry-NLK of Vancouver is serving as the Owner's Engineer for the project.

Markets, Employment
The Besicorp-Empire newsprint mill will produce about 8% of the newsprint consumed in the regional market. Letters of Intent or contracts to purchase the majority of newsprint from the facility are in place from firms such as The New York Times, Gannett, Dow Jones, Advance Publications, and The Los Angeles Times. New York State currently imports 1.2 million tons of newsprint annually.

The high-efficiency, cost effective truck and rail system servicing the new facility will benefit both customers and the mill. Besicorp-Empire estimates that delivered costs of newsprint from the mill could be significantly lower that that of competitive producers both in and outside the region.

The company anticipates employing more than 1,000 workers at peak construction, with an estimated payroll of $135 million. During operation, the projects will employ more than over 200 people with an estimated payroll of some $9 million per year. In addition, the multiplier effect of the projects through products and services will have a significant positive impact on the local economy.

Both projects are being constructed on property in Rensselaer formerly owned by BASF Corp. BASF ceased production at this site in December 2000 and is currently remediating it for reuse.

Experience Behind the Project
The newsprint-power project combines the considerable experience and backgrounds of its two parent companies. Besicorp Development Co. has successfully completed six cogeneration facilities in upstate New York during the last 14 years. Empire State Newsprint contributes its extensive knowledge and experience in the pulp and paper industry.

In addition, four retired paper industry senior executives, with a combined 120 years of paper industry expertise, sit on the new company's board of directors. Benjamin Thorp III (formerly with Georgia-Pacific) is chairman, and other board members include John Nevin (formerly with James River), William Boehmler (formerly Treasurer of IP), and Thomas Blackburn (formerly of Chesapeake Corp.). Also serving on the board are William T. Seils, president of Besicorp-Empire Development Co., and Michael Zinn, lead investor in the project who has led Besicorp since its founding in 1976.

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