Two new companies on Monday announced their interest in potentially purchasing and restarting the Bucksport paper mill, which Verso Paper Corp. plans to sell to a scrap metal company.
In letters addressed to U.S. District Judge John A. Woodcock Jr. dated Jan. 19, representatives of Minimill Technologies Inc. of Syracuse, New York, and Fibre Technologies of Reading, Pennsylvania, claim their companies would like the opportunity to explore the purchase of the paper mill, which employed more than 500 people until it closed Dec. 31.
FIBRE TECHNOLOGIES' LETTER TO JUDGE WOODCOCK
MINIMILL TECHNOLOGIES' LETTER TO JUDGE WOODCOCK
They are the second and third companies to express interest in purchasing the mill. The CEO of Kejriwal Singapore International wrote a letter to Woodcock on Friday that says his company is interested in purchasing the Bucksport mill.
The letters from Minimill Technologies and Fibre Technologies came the day before a court hearing in which Woodcock will consider whether to block Verso’s planned sale of the mill to AIM Development LLC, a subsidiary of American Iron and Metal, a Montreal scrap metal recycler.
The Bucksport chapter of the International Association of Machinists and Aerospace Workers, which represents 59 hourly employees at the mill, filed a lawsuit on Dec. 15 that claims Verso ignored legitimate inquiries from companies that were interested in purchasing the mill and continuing to operate it as a paper-producing facility. The union claims the plan to sell the mill to AIM violates antitrust laws and is an illegal attempt by the company to limit the supply of coated paper on the market. It is seeking an injunction that would halt the sale of the mill and create an opportunity for another buyer to be found who will continue to produce paper, preserving more than 500 local jobs.
The hearing is scheduled for 8 a.m. Tuesday at U.S. District Court in Bangor.
PAPER-MAKING WOULD CONTINUE
Minimill Technologies has experience constructing and converting paper mills in the newsprint and packaging sectors. It was responsible for the construction and operation of Solvay Paperboard, a recycled containerboard mill in Solvay, New York; and the Cascades/Norampac recycled containerboard mill in Niagara Falls, New York, according to the letter, which is signed by Stephen Read, a senior adviser and development partner in Minimill Technologies. Besides its Syracuse office, Minimill also has an office in Chennai, India.
“I am writing to advise you of our strong interest in evaluating the Bucksport Mill for a possible acquisition and conversion to a new grade of paper that would be non-competitive to Verso,” Read wrote to Woodcock.
Reached on his cellphone Monday afternoon, Read reiterated that Minimill Technologies is a serious buyer, but declined to provide additional details about its plans for the Bucksport mill. He did, however, say the company has “great experience in containerboard operations” and that converting the Bucksport mill to produce containerboard “is an option.”
“We’re very familiar with what needs to be done here,” Read said. “If we get to the negotiating table we feel optimistic with the general information we have about the mill to proceed forward from there.”
He confirmed that Minimill Technologies didn’t reach out to Verso to express interest in the mill prior to its announced sale to AIM. It was only in the past week or so that the company was made aware of the Bucksport mill’s situation, Read said.
“We’re late to the game, but we’re serious and hopefully we’ll have an opportunity,” he said.
Fibre Technologies is also a company with experience in converting unprofitable paper mills to ones producing more profitable products, according to a letter written by Robert Pederzani, Fibre Technologies’ owner, to Woodcock.
“Our interest in the Bucksport mill dates to the closure announcement made last October, and (is) based on the fact that this mill … can produce lightweight sheets that conform to unique specifications we have developed for high-performance, non-commodity packaging products,” Pederzani wrote.
The Bucksport mill produced coated paper used in magazines and catalogs before Verso closed it in December. The coated paper market in North America has been shrinking, which is why Minimill Technologies and Fibre Technologies would seek to convert the mill to produce a different type of paper product.
Pederzani wrote to Woodcock that when a company like Verso closes a mill, a sale process should follow to allow companies like his to do their due diligence.
“This intense and necessary process provides for the disclosure of, and vigorous vetting of, all information required to fully inform potential buyers,” Pederzani wrote. “Such a process was never established, to my knowledge. It could simply be that Verso did not know that there were any other uses for the mill. Fortunately, perhaps, there are.”
Pederzani said that without a due diligence process, no company would buy the mill from Verso.
“We are not in the scrap business,” he wrote, “we are in the business of building businesses.”
MILL COULD SERVE ASIAN MARKETS
In his letter to Woodcock on Friday, Rahul Kejriwal, CEO of Kejriwal Singapore International, expressed his company’s interest in purchasing the Bucksport mill from Verso and rehiring several hundred people to operate it.
In the letter, Kejriwal claims his Mumbai, India-based company has more than $1 billion in sales and more than 8,000 employees in 23 countries. However, the company is not well known in North America. Chris Cook, deputy editor of California-based trade publication Pulp and Paper Week, was not familiar with the company.
But Peter Hanson, a paper industry consultant and former president of Great Northern Paper, which operated the East Millinocket paper mill, has worked with Kejriwal and said that despite its little-known reputation on this side of the ocean, it’s one of the largest office supply companies in the world. Hanson said the company has been looking at paper-making assets in North America to help serve the growing Asian market.
“They want to acquire North American assets,” Hanson said. “That’s a strategic initiative of this company.”
Rosaire Pelletier, senior forest products adviser to Gov. Paul LePage, is also familiar with Kejriwal because of the latter’s previous interest in other Maine mills.
“They’ve showed interest in other assets in Maine and other assets in other states,” Pelletier said, adding that Kejriwal was one of the foreign companies that expressed interest in purchasing the East Millinocket paper mill out of bankruptcy. That mill was sold at a Dec. 2 bankruptcy auction to Hackman Capital Acquisition LLC, which specializes in the purchase and sale of industrial properties and equipment.
When asked if Kejriwal is considered a legitimate buyer, Pelletier said it was – despite its low profile in North America. As an example, he compared Kejriwal to International Grand Investment Corp., the subsidiary of a Chinese holding company that purchased the Woodland pulp mill in Baileyville in 2010 for $64 million. Prior to 2010, no one had heard of IGIC, “but they bought Woodland and are putting in two tissue machines,” Pelletier said. “So (is Kejriwal) capable of doing it? I don’t know, but are they spending their money looking at mills in Maine for nothing?”
It’s unclear whether the letters from Kejriwal, Minimill Technologies and Fibre Technologies will influence Woodcock’s decision on whether to grant the union’s request for an injunction.
Whit Richardson can be contacted at 791-6463 or at:
Twitter: whit_richardson
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