Baldacci optimistic about Old Town mill

OLD TOWN – When the sale of Georgia-Pacific Corp. was announced Sunday afternoon, the status of G-P’s mill in Old Town and the fate of its employees was up in the air.

However, Maine Gov. John Baldacci said late Sunday that both sides assured him that things are not likely to change.

“We’ll have more information after tomorrow, but the early sign is that operations in Old Town will not be affected,” the governor said by phone.

Georgia-Pacific, which manufactures many different paper products, including Brawny paper towels and Angel Soft bath tissue, agreed Sunday to sell to Koch Industries Inc. for $13.2 billion. The deal is not likely to be finalized before 2006.

Based in Kansas, Koch Industries is the second-largest private company in the nation and operates refineries and pipelines, trades commodities and manufactures pulp and paper.

Georgia-Pacific has owned and operated the Old Town mill since it was purchased from Fort James Corp. in December 2000. The mill announced about a month ago that it was cutting 50 jobs, but it still employs about 400 workers and is Old Town’s largest taxpayer.

City Manager Peggy Daigle said Sunday that she was surprised by the sale.

“From the city standpoint, I’m disappointed that we didn’t have any information on the sale with the company,” Daigle said. “We’ve been trying to work with them. … I’m disappointed that I had to find out this way.”

Those closer to the Old Town mill’s operation were not as shocked about the sale. Rick Douglas, controller for G-P’s Old Town mill, said Sunday that it did not come as a huge surprise to him, but he declined to comment further.

“I’m sure I’ll be learning more about this tomorrow when I get to work,” he said. “We don’t know what this means for us, but obviously it’s a huge, corporatewide acquisition.”

“We’re about 1 percent of Georgia-Pacific, so we have no idea what this [sale] will do,” he added.

Officials at the Old Town mill announced in early October that 50 jobs would be cut because the company was shutting down all of its converting lines in Old Town. Later that month, Georgia-Pacific announced that its third-quarter profit fell 40 percent as rising costs and lower prices hurt its bottom line.

“I live in East Millinocket, and up here Great Northern [Paper Co.] has been sold five or six times, so I think it’s a trend in the industry,” Daigle said.

As for the effect the sale will have on Old Town, she said, “A lot will depend on the agreement of the sale and the new owners.”

Baldacci was much more optimistic.

“People should know, especially in Old Town, that the steps that everyone has taken have enhanced the viability of that plant,” he said.

Jack Cashman, the state’s community and economic development commissioner, agreed.

“The workers that are there, they’ve been concerned about the future of the mill for a while,” he said Sunday. “I can’t speak for them, but [the state] will welcome the new owners and work with them.

The G-P mill also was involved recently in a three-way landfill deal among the state, Georgia-Pacific and Casella Waste Systems Inc.

The deal was designed to keep the Old Town paper mill open while addressing the state’s solid waste disposal problem. The state bought the landfill site from G-P for $26 million and chose Casella, which runs the Pine Tree Landfill in Hampden, to operate it.

It was not clear Sunday whether that deal would be affected by the sale.