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Management Side
Former sales director leads late effort to restart Lincoln mill


PORTLAND, Maine (From The Bangor Daily News) -- Ever the salesman, former Lincoln Paper and Tissue sales director John McMahon has a new pitch to restart a two-machine speciality tissue business in Lincoln by June.

The paper industry veteran said in a telephone interview Friday afternoon that he and potential financial backers will tour the mill Saturday with a team of engineers, kicking the tires on a business plan he hopes could return the mill to a profitable business.

"Tissue should not be shut down," McMahon said. "I think we can understand all the reasons that [the business] went down, but it's not definitive for the ongoing business. The mill is rundown, but the actual market for [the mill's products] is there, viable and profitable."

Putting together an offer on the remaining mill assets a week before liquidators hold an auction on the machinery "is not the ideal situation," McMahon said, but the timing of other deals necessitated the late play, likely a price of more than $10 million.

The sale of the mill's No. 8 tissue machine officially closed earlier this week, he said, completing a deal the mill's new owners reached earlier this year. The Boston-based Gordon Bros. Group, which led the group of buyers for the Lincoln and Old Town mills, was not immediately available for comment Friday.

Lincoln Town Council Chairman Steve Clay said he was guardedly optimistic that the mill would restart.

"I hope something good will happen, but all you can really do is wait and see," Clay said Friday.

Union officials and others were not optimistic about the prospects for a restart given the loss of that third machine. McMahon said neither was he, thinking the potential financier would have less interest without the machine for making commodity products, such as tissues and napkins.

Without that machine, though, McMahon said the mill could generate all of its own power, and investment in equipment to produce recycled pulp on-site could feed the restart of the No. 7 tissue machine and provide an initial foothold in the North American market for colored tissue paper that he said has only one other major producer.

"Those two items alone are worth $6 million to us a year and that changes everything overnight," McMahon said.

McMahon said he had tried to make offers to the buyer of the No. 8 tissue machine, Kruger Paper, to keep it on site, but those entreaties failed.

His hope now is that a deal comes together for the equipment needed to run the mill's two tissue machines, which he said Gordon Bros. maintained well through the winter, keeping open the possibility of a quick restart. But the mill needs replenishment of raw materials, too, he said, from pulp to dyes.

McMahon estimates that initial phase could bring about 100 employees back to work, proving that the mill can generate a profit and providing a stable platform for research and development in future years for new markets, such as fibers wound into protective armor for military applications.

"Paper machines are the most efficient ways to make a continuous web of something," McMahon said. "The key is to differentiate yourself by making stuff that's not made from pulp."

McMahon said he sees a promising business in Lincoln and potential to bring back most of the 179 jobs that were lost by the time the mill filed for bankruptcy. The 2013 explosion of a recovery boiler powering its pulp- and papermaking equipment had already resulted in about 185 layoffs.

McMahon said a GoFundMe account set up by former mill employee Tony Stewart hopes to raise money to help fund the business restart, or help laid-off workers weather the job loss.

Stewart, who has represented local workers in helping McMahon's efforts, said it is a mistake to lump Lincoln's mill in with all the others that have gone down in the last few years.

"We have worked hard over the last three months to get something going, and John is the driving force behind it. He certainly has put a lot of effort in this," Stewart said Friday. "Everybody gave up on Lincoln, including the Maine government, and it was written off in the papers. It didn't deserve to be written off.

"With Lincoln it's different because it is a tissue mill," Stewart added. "There's a good sales plan, a good business plan, and there's no reason that it can't run."

McMahon said much of the motivation to pursue the restart is personal, too. He came back on to lead sales last May, months before the company filed for Chapter 11 bankruptcy, about a decade after leaving the company where he'd gotten his start, under the mill's former owner Joe Torras.

Torras, a Harvard Business School graduate who bought the shuttered mill in 1969 and ran it for 35 years, passed away in 2014.

"Joe was like a father to me," McMahon said.

As the mill's fate will likely be decided in the next week, McMahon said he hopes he can follow in Torras' footsteps.

"Hopefully it will all stabilize and at the end of it we can all raise a glass and say that we can put 100 people back to work," McMahon said.

The joint auction for the Lincoln and Old Town mills is due to run from Tuesday through Thursday in person and online, with a fourth day of online-only auctioning Friday.


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