Paper mill's reopening is celebrated


June 18, 2011
GORHAM — Friday was a gala day of celebration and renewal for the Androscoggin Valley.

A crowd of over 200 union workers and spouses, all adversely affected by layoffs when the Gorham paper mill at Cascades was shuttered in mid-October 2010, clapped and cheered when the mill's new owner, Lynn Tilton, CEO of the private equity firm and holding company Patriarch Partners of New York, emerged around 11:30 a.m. from the SUV in which she had been driven from the Berlin Municipal Airport in Milan.

Local politicians, such as Sen. John Gallus, plus nonprofit leaders, such as AVH CEO Russ Keene, and entrepreneurial business owners were on hand for the celebration and a barbeque.

When Tilton spotted plant manager Willis Blevins, she threw her arms around him in delight and gave him a quick hug. Patriarch Partners purchased the mill and equipment on May 17 for an undisclosed price. The land cost $2 million.

Part of the deal was that Blevins would stay on, Tilton said.

The plant manager's business plan includes the purchase a $35 million custom-made tissue machine that will take about a year to have built in an effort to diversify as well as to make significant reductions in the cost of energy by bringing in both natural gas and landfill methane gas.

Then the CEO, a 1981 graduate of Yale University who said that the renamed Gorham Paper & Tissue, LLC, is the 75th company that she has purchased, talked with the media: Associated Press (AP), WMUR-TV, NHPR, the Union Leader, local newspapers, and a crew filming a segment for a reality show.

Tilton said that things would have to be done differently than in the past but that perseverance and initiative would result in the mill's operating for a very long time. Area children will have the opportunity to work with dignity, making things with their own hands, she said.

Tilton would like to show America that there is new life in small towns for those risk-takers who have both the desire and the significant capital needed to succeed in a turnaround situation.

"We need to put together a different business model," Tilton said, noting it is essential to be able to weather the booms and busts of the paper industry. Once the paper mill converts from burning oil to natural gas in about five months, more competitive pricing will make it possible to deal with the busts, she predicted.

A little over 200 jobs will be saved or added, Tilton said. On Friday, 35 were already on the payroll, and 60 have been called back to start operating the No. 9 towel machine on June 22.

Another 55 will return to work on July 17, likely to operate the No. 1 flat paper fine paper machine. The No. 4 machine will come on line last.

"You have to have a dream and a vision," Tilton said. "It's the workers who are important; we cannot be against each other." She praised the local work ethic, noting that union workers had developed a culture of appreciation for work and a willingness to battle their way through adversity and hard times.

"Let's remember every day that we are responsible for making people believe they can invest in mills and for making them believe that they can invest in manufacturing," Tilton said. "If we fail, we give credence to those who believe that we don't want these jobs in our nation, that these are jobs that should go overseas.

"Together, we are going to set an example for the rest of the country," she said. "Let's make this a fairy tale."

When asked by AP reporter Kathy McCormack about whether being a woman presents special challenges in the business world, Tilton replied that she is the only female CEO of a private equity fund. It's been difficult to be accepted and "to break the male paradigm," she said. Women, Tilton added, account for only three percent of the CEOs heading up of the 500 biggest U.S. companies, known as the Forbes 500. Furthermore, she added, only a few women serve on the boards of directors of major corporations, Tilton pointed out. "Women are not kind enough to each other," she said.

As Tilton made her way to the loading dock ramp, she stopped to talk with workers as well as some of those in the Berlin-Gorham area who helped to make reopening the mill possible, including Sharon Gauthier, executive director of the Androscoggin Valley Regional Refuse Disposal District and its board chair, Linda Cushman of Jefferson, Gorham town manager Robin Frost, and Berlin Mayor Paul Grenier.

Then, when Tilton put on a pair of synthetic gloves to help paint the steel ramp, she pointed up her index finger and inquired jokingly, "Who wants a checkup?"

"There's a sweet Lynn Tilton and a tough Lynn Tilton," she said.

Recognizing the hardships and uncertainties that workers have faced since Fraser Papers slid into bankruptcy some two years ago, followed by the mill's shutdown last fall, Tilton added, "There will be further bumps on the road, and I'll be with you all the way."

Both Governor John Lynch and Senator Jeanne Shaheen were praised for the key roles they played in saving the mill from being torn down as the price of scrap rose sharply this spring.

Both spoke from a podium set up on the loading dock and praised the Berlin-Gorham workers for their work ethic and dogged persistence in supporting efforts to reopen the mill.

The ongoing work of Commissioner George Bald of the Department of Resources and Economic Development (DRED) was also touted by a variety of speakers, including Blevins.

"Everyone came together," he and others said.

Tilton's daughter Carly, who works for Patriarch Partners, traveled with Tilton in her Gulfstream 200 plane, as did Steven Goldberg, who works in the New York office of the Finsbury Group, an international public relations firm.

Dick Arnold, who is the decision-maker at Old Town Fuel and Fiber in Old Town, Me., another Patriarch Partners investment, was also on hand. The Gorham mill will buy some of its pulp from Old Town, which is also working hard working to get an acceptable ASTM rating for a wood-fiber-based helicopter biofuel, a.k.a., cellulosic bio-butanol. ASTM is an international standards organization.

Arnold is now serving as CEO of both the Old Town and Gorham mills, splitting his time between the two mill towns.

John Harrington of Needham, Mass., is also playing a key management role, working with Arnold to make important decisions through a bidding process — based on pricing and service — as to which area firms will be Gorham Paper and Tissue's vendors and contractors.

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