Park Falls Paper Mill Reopens

Wausau, Wisconsin, USA, 05 August 2006 -- Four months ago, bankruptcy forced Smart Papers to closure 100-year-old Park Falls (Wisconsin) paper mill, with a loss of about 300 jobs.

An investor group, lead by William "Butch" Johnson, is set to reopen the mill under the new name of Flambeau River Papers, LLC.

Johnson assembled a group of private investors who acquired the mill from SMART Papers with approval of the bankruptcy judge. The partnership includes paper distributor CellMark of Stamford, Connecticut.

Financing for the $19 million deal included a USD 4 million package of state loans.

Smart Papers, of Hamilton, Ohio, filed for bankruptcy in shutting down the mill in April, citing unprecedented high fuel costs and a rapid deterioration of market conditions. Smart Papers closed the mill barely a year after buying it from Toronto-based Fraser Paper.

"Buying the mill was a big job. But the bigger job is to see if we can run it properly," said Johnson, who has been in the forest products industry on the timber side since 1973.

One key to cutting costs and improving profits is to reduce the mill's dependence on natural gas to make steam, a big part of the paper-making process, he said. Plans are in place to install a second boiler that burns wood waste within 18 months, eliminating natural gas as a fuel and saving USD 4-5 million a year, he said.

About half the 300 former workers are already back on the job doing maintenance and other startup tasks, he said.

The future looks bright for the mill in part because the new owners hope to apply for millions of dollars in federal grants to establish an experimental biorefinery to explore the feasibility of making ethanol and biodiesel from wood products.

If successful, the idea has huge potential for Wisconsin and its wood products industry, he said.