Fraser CEO to brief Katahdin workers

EAST MILLINOCKET – Fraser Papers Chief Executive Officer Peter Gordon and other top-level executives will visit the Katahdin Paper Co. LLC mill today to discuss the mill’s future, company officials said Monday.

“They will be going over the business plan for East Millinocket with the employees,” said Glenn Saucier, personnel manager and spokesman for Katahdin Paper.

The company’s sister mill in Millinocket was shut down indefinitely on Sept. 2 due to its dependence upon oil. The mill consumed 400,000 barrels in 2007. The East Millinocket mill is “behind in its plan, profitabilitywise,” but the company has nothing extreme on the agenda, Saucier said.

“We don’t see any anticipated layoffs or hires or anything like that,” Saucier said.

Gordon and Jeff Dutton, Fraser’s chief operating officer, will be meeting with workers and management in morning and afternoon sessions, Saucier said.

Duane Lugdon, an international representative for three United Steelworkers International unions at the Millinocket and East Millinocket paper mills, described the visit as routine. It’s something Fraser execs do once or twice annually, he said.

“It’s an update of the current situation and where they need to go,” Lugdon said Monday.

Multibillion-dollar conglomerate Brookfield Asset Management of Toronto owns the two Katahdin paper mills, the Katahdin region’s largest employers. Fraser manages the two mills for Brookfield, plus other holdings, although the mills are their own corporate entities as Katahdin Paper Co. LLC.

Fraser reported a net loss of $15.6 million or $0.31 per share in the second quarter of 2008, which the company described as an improvement from the net loss of $19.1 million or $0.44 per share in the first quarter.

The improved results were generated despite a significant increase in energy and chemical costs compared to the first quarter. Improved selling prices for paper products, improved productivity and lower oil consumption more than offset higher oil and chemical prices, a company press release said.

For the six months ended June 28, 2008, net loss improved $12.8 million from the $47.5 million loss generated in 2007. The 2007 results included restructuring charges related to the permanent closure of two paper machines at other facilities.

The mill off Route 157 has undergone a management restructuring as part of the temporary closure of the Millinocket mill. As many as 208 positions were due to be cut. As of Monday, 39 workers had been laid off with three of those being laid off last week, Saucier said.

The layoffs are occurring gradually because the mill is being winterized and mothballed until it can restart. Gov. John Baldacci, whose intercession helped convince Brookfield to commit to reopening the mill, has said the mill will reopen in 2009.

Baldacci said late last month that he is due to learn from Brookfield on Wednesday what the Millinocket mill’s restart plans are. That date was still set as of Monday, his spokesman said.

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