OLD TOWN, Maine (From news reports) -- The Old Town Mill is being sold again, this time to the Hong Kong company that also owns a paper mill in Rumford with a promise of bringing "well over 100 high-paying jobs" to the area.
ND Paper LLC, a wholly owned subsidiary of Nine Dragons Paper (Holdings) Ltd., said Wednesday it has a definitive asset purchase agreement to buy the Old Town property from OTM Holdings LLC, a subsidiary of CVG Inc.
ND Paper will pay an undisclosed amount for the Old Town bleached kraft pulp mill plus approximately 100 acres in Old Town.
OTM Holdings bought the mill in January, saying it would bring 100 jobs to the area as it aimed to attract tenants to the mill who would use low-grade fiber from Maine's forestry industry.
The purchase was clouded by a lawsuit by a Cape Elizabeth businessman who tried unsuccessfully to purchase the Old Town mill and sought compensation for his efforts to line up the failed deal.
Prior to its idling in the fourth quarter of 2015, the Old Town mill manufactured and distributed about 155,000 air-dried metric tons annually of bleached hardwood kraft pulp.
In a statement, ND Paper said the mill will be reconfigured to operate at substantially lower manufacturing costs compared to the predecessor company.
To cut costs, ND Paper will move the production mix from hardwood kraft to softwood kraft pulp, because the latter is abundant locally. It also will eliminate the bleaching operations and focus on unbleached softwood pulp. And the mill will share several management and administrative functions with ND Paper's Rumford division, lowering overall overhead costs.
After a series of phased capital investments, ND Paper said it expects the mill will restart in the first quarter of 2019 and ultimately produce 275,000 air-dried metric tons annually of unbleached kraft pulp.
"By leveraging our existing manufacturing platform in Maine, combined with the financial capacity to wisely invest in the mill's production capabilities, we expect to create a very strong future for this facility. We are absolutely thrilled to restart the Old Town mill and return well over 100 high-paying jobs to Penobscot County," Ken Liu, CEO of ND Paper, said in a prepared statement.
ND Paper expects to complete the transaction in the next 30 days, subject to customary closing conditions and approvals.
The company on Tuesday announced its plans to invest $111 million into the Rumford mill in the next two years.
ND Paper spokesman Brian Boland said the investment will sustain the jobs of 650 employees and add 50 more, with an average salary for the new employees estimated at about $70,000 a year.