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August 27, 2012

Officials: Revamped Canadian mill will undercut Maine operations

Plans to reopen a shuttered Nova Scotia mill have some Maine paper industry officials concerned over the state's ability to compete with the government-subsidized operation.

The premier of Nova Scotia announced plans last week to provide the former NewPage mill on Cape Breton with $125 million in funding, according to the Portland Press Herald.

The announcement has garnered the attention of industry leaders like Maine Pulp and Paper Association President John Williams, who told the Press Herald that provincial subsidies for the Cape Breton mill will allow the operation to undercut Maine's prices. The mill makes similar products to those manufactured at some of Maine's largest mills, including magazine and catalog paper.

The Cape Breton mill closed last September, putting 600 employees and 400 loggers out of work, according to the paper. The mill has since been purchased by British Columbia-based Pacific West Commercial Corp., which announced plans to revamp the mill in a more streamlined manner.

NewPage Corp., which filed a joint Chapter 11 plan with the U. S. Bankruptcy Court for the District of Delaware earlier this month, declared bankruptcy in September 2011.The Ohio-based company is owned by private equity investment firm Cerberus Capital Management and had reported net sales of $3.5 billion for the year ended Dec. 31, 2011.

In addition to the plant in Rumford, the company owns paper mills in Kentucky, Maryland, Michigan, Minnesota and Wisconsin.

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