July 22, 2008

Katahdin Mill Extends Operation Millinocket Plant Has Enough Orders to Stay Open Until Aug. 9


MILLINOCKET - The Katahdin Paper Co. mill has enough orders to stay open until at least Aug. 9 more than two weeks after it initially was due to shut down.

"What's saving us right now is ... [that] some customers have come forward and said, 'We like your product and want to continue to buy from you,'" said Duane Lugdon, the international representative for the United Steelworkers union, which has a combined 350 members in Katahdin's mills in Millinocket and East Millinocket. "Obviously, nobody wants to see this mill go down."

Katahdin makes paper for catalogs, magazines and retail industrial fliers.

Katahdin officials informed Lugdon and other union leaders during a meeting Monday morning that the mill would stay open after its previously scheduled July 28 shutdown date and that the company's sales force was trying to generate additional orders to keep the mill running beyond Aug. 9.

The unions representing millworkers issued a joint statement to members after Monday's meeting.

Officials from Katahdin Paper and Fraser Papers, which runs the mill for Brookfield Asset Management, could not be reached for comment Monday evening.

The Millinocket mill, which has its steam production powered by oil, has struggled as oil prices have risen. The facility used about 400,000 barrels of oil in 2007. Katahdin has been pursuing an alternative energy source such as a biomass boiler.

Lugdon, who participated in Monday's meeting, said Katahdin is talking to two companies about retrofitting a biomass boiler for the facility to reduce dependence on oil.

Lugdon said the summer weather means the mill doesn't need massive quantities of oil to heat the facility.

"Until they get that deal worked out, they have enough orders to run," he said. "They started to realize they could still run the mill while the weather was warm, and be profitable because the cold weather hasn't arrived."

A mill closure would mean the loss of 208 jobs. Some senior- level jobs could transfer to the Katahdin Paper mill in East Millinocket, which employs about 350 workers. The East Millinocket mill makes telephone directory paper.

The mill's original shutdown date was announced May 29. The July 28 date was assigned because of the federal Worker Adjustment and Retraining Notification Act, which mandates companies that are going to shut down and lay off more than 100 workers give 60 days' notice. Katahdin will now amend the WARN notice until Aug. 9. If the mill has enough additional orders to run beyond Aug. 9, a new WARN notice may be issued.

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