More changes ahead for Fraser Plan to divide firm won’t affect Maine

MADAWASKA – Yet another change at the company that pays more than 60 percent of the property taxes and employs the majority of workers in Madawaska is causing some anxiety in town.

Nexfor Inc. officials on Thursday night announced a plan to divide the company into two independent companies: one a specialty papers and timberland business, the second a wood-based panelboard business. Dominic Gammiero, president and CEO of Nexfor, made the announcement in Toronto.

Madawaska company officials said Friday that little will change here. Fraser once again will become a stand-alone company, with its own board of directors.

“According to what we have been told there will be no local changes for most employees,” Richard Marston, manager of human resources at the Madawaska mill, said Friday afternoon. “There will be little impact locally.

“It will be business as usual here,” he said. “We will be part of a more focused company, a low-cost producer of paper.”

The plan means yet another name change for Aroostook County’s largest employer, renamed from Nexfor Fraser papers Inc. to Fraser Papers Inc. The company, which has been through many name changes since Noranda Mines Ltd. acquired controlling shares of Fraser Paper Ltd. in 1974, always has been known simply as Fraser in Madawaska.

On July 1, Fraser will become a stand-alone company whose shares will be available on the Toronto Stock Exchange, Marston explained.

The panelboard company will be known as Norbord Inc. Most of the plants affiliated with that company are in Europe.

“Fraser is a well-positioned business with a clear focus, a strong customer base and the ability to rebound quickly as market conditions improve,” Gammiero wrote in a press release.

The changes, approved Thursday by Nexfor’s board of directors, will be decided by shareholders at the annual meeting in June.

Under the plan, Nexfor shareholders will continue to own their current shares and receive one share in Fraser Papers for every five Nexfor shares they hold.

Brascan Corp., which last year purchased paper mills in Millinocket and East Millinocket, owns 43 percent of the shares in Nexfor Inc. The corporation reportedly supports the move and intends to keep its shares in Fraser Papers.

A press release from the Toronto headquarters of Nexfor Inc. said the change, which officials believe “will be financially beneficial to both” new companies, will bring about no management changes.

In April 2003, Fraser announced that 331 jobs would be cut from the 1,600 jobs at the Madawaska-Edmundston, New Brunswick, complex. At Madawaska alone, the number was pegged at 190 jobs. Many people in the area are still reeling from those actions.

Fraser Paper has been well known in the paper industry for more than 75 years. It is one of North America’s largest producers of specialty papers, including light and ultralight publishing grades.

Fraser Papers Inc., a publicly traded papermaking company, has annual sales of $850 million. It annually manufactures 780,000 tons of paper and 350,000 tons of market pulp. The company operates 19 paper and pulp machines in Maine, New Hampshire, Wisconsin, Quebec and New Brunswick.

It also owns 1 million acres of timberland in Maine and New Brunswick, and operates on another 1 million acres in New Brunswick. Its four sawmills in Maine and New Brunswick produce 460 million feet of lumber per year. Overall, the company employs 3,850 people.

Its headquarters, which were once in Edmundston, are now located in Stamford, Conn.