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Sappi says it'll invest $418M into Skowhegan mill to double its paper-making capacity

skowhegan mill.jpg
Gabor Degre / BDN
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The Somerset Mill in Skowhegan is shown in this file photo from February 2017.

Sappi North America announced Thursday that it will invest $418 million to rebuild and double the capacity of one of its paper machines at the Somerset mill in Skowhegan.

The announcement came two days after the mid-term election, where the future of the Skowhegan mill itself had been a flashpoint in Maine's gubernatorial race.

The project, which earned praise on Thursday from Gov. Janet Mills and US Sens. Susan Collins and Angus King, will allow the mill to make more packaging materials.

Over the years, the mill has slowly shifted away from producing glossy graphic paper and more toward packaging.

"We're finding that the demand for the paper packaging grades that we're offering off our no. 1 machine are in very high demand," said Sean Wallace, managing director for the Somerset mill. "So we believe that moving no. 2 into those same grades is a long-term benefit for the mill."

Plans to expand the paper machine's capacity have been in the works for years, Wallace said, as the company wanted to diversify what it produced.

The project was discussed at a regularly scheduled board meeting Wednesday, the same day Sappi released its quarterly financial results.

"We just received approval for the project from our board yesterday," Wallace said.

But the announcement of Sappi's new investment — made just two days after the mid-term elections — was perhaps a surprise for those following Maine's gubernatorial race.

The future of the Somerset mill had become a fall campaign issue, as former Gov. Paul LePage claimed that Gov. Janet Mills wanted to remove the Shawmut Dam, which Sappi says it relies on to operate.

The dam is one of four on the Kennebec River owned by Brookfield Renewable US, which has been locked in a lengthy debate with environmentalists over how best to protect endangered Atlantic salmon.

Brookfield has applied for a permit to relicense the dam, but that's on hold while the state reviews a new water quality certification application and federal regulators complete an environmental study.

For LePage, this was a sign that the Mills administration wanted to remove the dam, putting the Sappi mill and its hundreds of jobs at risk, an issue that he raised at various events throughout his campaign.

"They are working behind our backs right now to shut those dams down," LePage said during an October forum hosted by the Mid-Maine Chamber of Commerce. "If Janet Mills gets elected, Sappi's gone. End of story."

Mills accused her predecessor of scare tactics. In a campaign ad, she said she had no plans to jeopardize the Sappi mill and its 750 jobs.

"I've said that to the management of Sappi, I've said it to the president of the local union and now I'm saying it to you," Mills said in the ad. "I will always defend the Sappi mill and Maine mill jobs. Don't let other people scare you into believing otherwise."

Walls said Mills reiterated that position when he spoke with her Thursday morning.

"I think she's been fairly clear in her comments regarding the Shawmut Dam, that she's not going to do anything that threatens the long-term viability of the Somerset mill," he said.

The dam is critical for the mill to stay open, Wallace said. Sappi hired engineers who studied the mill's operations, and there are no alternatives, he added.

"The dam really needs to stay in place for us to continue to operate, so it is critical that that issue gets resolved as we move forward with the project," Wallace said. "But we have trust in the governor that she's going to live by her word and eventually find a solution to relicensing the dam."

As for the 750 Sappi jobs that were a hotly contested campaign talking point, Wallace anticipates the mill may add a few dozen others with the paper machine conversion. Any workforce increases at the mill itself will be modest, he said, though the project should produce more shipping and trucking jobs.

The paper machine rebuild should be complete by early 2025, Sappi said.