MILFORD – A Canadian firm is moving ahead with plans to take over the defunct International Paper facility known as the old Costigan stud mill, City Manager Vance Merritt announced Wednesday.

The final paperwork went into the mail Tuesday, and should be complete in the next two weeks, he said.

“As far as Daaquam Maine is concerned it’s pretty much completed,” said Francois Sequin, general manager of the new sawmill. “We still expect to have the mill up and running in 2004, but I can’t tell you when in 2004.”

Daaquam Maine Inc., a subsidiary of a Canadian company based in St. Juste, Quebec, will manufacture lumber at the location, and will employ approximately 130 people when it starts operations, Sequin said.

“We intend to build a state-of-the-art sawmill,” he said. “It’s modern process equipment, so we recover as much lumber as possible.”

Daaquam will invest $38 million in the new plant, which will produce 12-foot studs, Merritt said.

“They did some research and found out that 12-foot studs were in demand but weren’t being produced anywhere,” he said. “When they get into full operation they will be sawing lumber that would be sufficient to build a three-bedroom ranch, in 15 minutes. It’s a lot of lumber and it’s going to be coming out fast.”

The mill’s payroll is approximately $5.2 million a year, Merritt said.

“There is a tremendous amount of money going to be dumped into this area,” he said.

Approximately 150 trucks will use the facility daily to transport materials, so local business owners should see increased revenues, Merritt said.

“Those trucks need to buy diesel fuel, and those drivers will need to be fed and have a place to stay,” he said. “As far as the deal we cut with them, we cut a TIF [tax increment financing], where they get a break on their taxes but we added to it that under no circumstances will we receive less than what International Paper produced [in taxes]. They will have to pay us at least $160,000 a year. This was a fairly neat piece of negotiations.”

Milford residents approved the TIF in February. In addition, the company has entered into an agreement to give back to the town.

“They will donate $25,000 for our recreation department, and during their fifth year of operation they will donate another $25,000 to our rec department,” said Merritt. “That’s not in the contract, it’s a gentleman’s agreement.”

On Wednesday, Milford town officials were helping the company fill out Maine Department of Environmental Protection paperwork showing the change in ownership.

Milford Town Council chairman Francis Richard and Merritt recently visited the company’s main plant in Canada.

“It’s the most modern machines in the country,” said Richard. “Nothing is wasted. Everything is used.”

Daaquam was founded in 1956, and was initially a family business. In 1987, current chairman and CEO Richard Belanger and vice president of operations Yvan Pouliot became active in the company. By 1996, they had acquired all shares in the company.

Daaquam Maine Inc. is a subsidiary of parent company Canfor Corp., which is based in Quebec.