JAY – International Paper Co. plans to invest $112 million to rebuild the No. 3 coated paper machine at its Androscoggin Mill and carry out other improvements.

A key element in winning corporate approval of the project was its strong support from townspeople, Mike Craft, mill manager, said Thursday. Jay voters last month voted 356-79 to support a 20-year tax break for the company.

The tax increment financing package allows IP to retain 60 percent of the taxes it will pay on the new investment and the town will keep 40 percent of the new taxes.

In addition to rebuilding the No. 3 machine, which makes paper for magazines and catalogs, the project includes upgrades in groundwood mill operations, the bleaching plant and the transformer system.

“International Paper’s intent for the coated papers business has been and will continue to be to invest in projects that increase efficiency, lower manufacturing costs and allow us to produce the innovative products that our customers demand,” Craft said. “This investment in the number three paper machine will accomplish all three objectives.”

The investment is expected to give the region more economic stability after several manufacturing business closings in Franklin County and the shutdown of paper mills around the state.

“It does add some to the tax base, but I think the most important part of this whole project is the stability it will offer to us as a community and region,” Town Manager Ruth Marden said. “In these economic times we’re experiencing, it is just fantastic news to have this type of economic growth in Jay.”

The project is expected to be completed next May.