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Management Side
Catalyst says it has major buyer lined up for tissue paper, taxpayer help would support 62 jobs in Rumford, Maine

RUMFORD, Maine (From The Bangor Daily News) -- Catalyst Paper Corp. wants Maine taxpayers to sweeten a $56-million investment in a tissue-making machine at its Rumford mill, as part of a company overhaul plan of untold cost that it calls Project Falcon.

The company said the project would allow it to take advantage of a growing market for the tissue paper, and even has a "major paper merchant" lined up to buy all that the new machine can produce. Catalyst told state investors the tissue paper enterprise will be able to support 62 full-time jobs, worth $79 million in annual payroll and benefits.

The Finance Authority of Maine on Thursday cleared the way for one part of Catalyst's financing plan using a state program meant to entice investment in economically troubled areas.

The proposed deal using the state's New Markets Capital Investment program could deliver about $12.7 million in state tax credits or taxpayer cash to investors in exchange for investing $31 million in the purchase and installation of a tissue paper machine at the Rumford mill, according to the project application.

The company applied separately for the maximum loan amount -- $25 million -- through finance authority's Major Business Expansion program. The finance authority will consider that application at a later meeting. Catalyst said that money is also needed to get the project in motion.

Company officials said the tissue machine will steady the future of the mill that employs about 640 people making pulp and coated paper. The market for that type of paper has been in steep decline, company officials said, and they need to expand their offerings to survive.

"We need to shift out of that," Randy Chicoine, the mill's general manager, told the finance authority board Thursday.

Chicoine said the deal is a top priority for Catalyst, the Richmond, British Columbia-based company that purchased the Rumford mill in 2015 as part of Verso Paper Corp.'s antitrust settlement with federal regulators. Catalyst last year reached terms to be purchased by the Indian firm Kejriwal Group International, but its shareholders nixed the deal in December in favor of a different deal to infuse new capital into the company.

Since then, Chicoine said the mill began work on a "transformation strategy" that led to cutting its costs by about 15 percent. The next phase involves getting the tissue machine up and running by 2020.

By that year, an economic impact study commissioned by the company estimates the new machine would support 62 full-time jobs, with 25 directly involved in producing tissue products and another 37 in support functions for that new line of business.

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