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January 24, 2014

Great Northern Paper halts production, retools

Great Northern Paper Co. LLC has decided to halt production at its East Millinocket plant for up to 16 weeks to give the company time to modify its business plan in the face of lower market prices for its paper and the rising costs of energy and materials.

A mill official said in a press release that 256 workers will stay on for at least two months to work toward improving operating efficiencies. The Bangor Daily News reported Scott Tranchemontagne, GNP’s spokesman, said that it is impossible to predict whether workers would be laid off at the end of the two-month period.

In its statement, the subsidiary of New Hampshire-based Cate Street Capital said that it will use the time to resolve outstanding payments to vendors, in addition to lowering the company’s production costs. Tranchemontagne said the mill’s effort to convert to natural gas heating was eyed as a savings but that recent volatile natural gas prices took that option off of the table.

Tranchemontagne said Cate Street continues to move ahead with its other subsidiary, Thermogen Industries, which plans to produce torrefied wood pellets — or biocoal — at a former paper mill in Millinocket that it purchased in 2011.

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