State makes pitch to ensure Old Town G-P mill’s survival

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AUGUSTA – The state’s economic development chief pitched a plan Thursday to protect some 400 jobs at Georgia-Pacific Corp.’s Old Town pulp mill, but the response won’t be known immediately.

Officials from G-P’s corporate headquarters who make decisions about company facilities met privately in Augusta with Economic Development Commissioner Jack Cashman.

“It went well. We met for several hours here, and they will go back to Atlanta and digest everything we talked about.”

The purpose of the meeting was to discuss a plan developed by Gov. John Baldacci and Cashman to ensure that the mill is a viable asset to its parent company.

The Baldacci proposal is designed to reduce operating costs at the mill by about $5 million a year.

“They’ve got some energy and fiber costs that are really the cost drivers there, and we’ve been working on proposals to address them,” Cashman said.

G-P corporate officials didn’t visit the Old Town facility, Cashman said.

“They’re very familiar with the mill,” Cashman said. “We met on discussing some strategies for moving forward.”

Georgia-Pacific has owned and run the mill since acquiring it from Fort James Corp. in December 2000. The sale of all G-P facilities to Koch Industries Inc. of Wichita, Kan., for $21 billion was completed in December 2005.

Although Koch owns the mill, G-P remains a stand-alone company. “They have not reached any final conclusions as of yet, and they continue to talk to us on the future of that mill,” Cashman said.

The mill was faced with a shutdown in 2003 but remained open after a brief closing. Recently, 50 employees were laid off, but that move wasn’t related to the Koch sale, according to G-P.

G-P is conducting an analysis of the strength and viability of each of its facilities.

“A review process would be normal whenever there’s a really large acquisition,” Lloyd Irland, a forest resources and economics consultant from Wayne, said Thursday.

When the Old Town mill was faced with closure in 2003, the Legislature passed a resolve that authorized the state to buy the West Old Town Landfill, now the Juniper Ridge Landfill, from G-P and select an operator.

With money from the sale and additional money provided by G-P, the mill’s boiler has been updated for $29 million.

As part of the landfill deal, Casella Waste Systems Inc., the state’s chosen landfill operator, must provide the mill with the necessary fuel for the boiler.

Energy costs remain high at G-P because a decision on regulations regarding the use of wood from construction and demolition debris as fuel is held up in the Legislature and state environmental agencies.

“We’re still waiting for the Department of Environmental Protection to make some changes to the regulations,” Old Town G-P spokeswoman Kelli Roy said. “Until that is complete, we’re not going to burn the construction and demolition debris.”

Although the biomass boiler has been installed and is running, the mill is burning green wood chips and bark, which is more expensive, until a final decision is made.

“I haven’t been following that particular mill, [but] I know it’s been difficult over there, and I’ve heard their managers talk about the challenges on a number of occasions,” Irland said.

Cashman wouldn’t elaborate Thursday on the details of the plan because, he said, private companies are involved.

Without knowing more details, Irland said, it’s hard to judge what the plan might include.

“For this state and other parts of the region, power cost is a very big issue,” Irland said. “It’s a big issue with our competitors in Quebec as well.”

For Cashman, the plan is part of an ongoing process.

“We’ve been working with [G-P] for three years on this. What’s changed is there’s obviously a new owner,” Cashman said.

As for a decision on the future of the Old Town mill, it’s entirely on G-P’s timetable, and the governor previously has stated that the mill isn’t closing.

“The new management folks, they give me the impression that their way of doing business is fairly quickly,” Cashman said. “They’re trying to assess what they bought and what they’re going to do into the future.”

Robert Burns, a G-P spokesman in Atlanta, said Thursday he had nothing new to add.

“G-P is in the process of reviewing its purchases, and no final decisions have been made,” he said.