published Wednesday, August 20th, 2014

McMinn County paper mill starts $105 million project

Participants hold shovels during a groundbreaking ceremony for a new construction project at Resolute Forest Products on Tuesday in Calhoun, Tenn.
Participants hold shovels during a groundbreaking ceremony for a new construction project at Resolute Forest Products on Tuesday in Calhoun, Tenn.
Photo by John Rawlston.

RESOLUTE FOREST PRODUCTS

The Montreal, Canada-based company owns and operates nearly 40 pulp and paper mills and wood products facilities in the U.S., Canada and South Korea.

CALHOUN, Tenn. — McMinn County Mayor John Gentry says he essentially kept two budgets amid the last business downturn in case there was a problem with the county's biggest taxpayer, known for years as the Bowater plant.

But on Tuesday, Gentry said a new $105 million expansion to the pulp and paper mill will provide stability to the plant -- and to the county's finances.

"It's a shot in the arm," said Gentry at the groundbreaking of the project Tuesday. "I see the company pivoting with the times to grow."

The expansion at Resolute Forest Products will add 50 more jobs to the existing 540-person staff and help specialty and commercial paper production, lower costs, increase quality and add about 50 more jobs.

Richard Garneau, chief executive of the Montreal, Canada-based company, said the planned work is Resolute's biggest single investment in 2014.

The expansion, to be completed in late 2015, will install a modern 220-foot-high pulp digester, or cooker, and other wood-chip processing equipment.

"It's a plant with a future," he said. "We'll have a better product and get into new paper grades."

Bill Hagerty, commissioner of the state Department of Economic and Community Development, said the project will help the company make higher demand products.

"It's a transformation of the site," he told about 100 people at the factory that's marking 60 years of operation.

Founded as one of the South's first newsprint mills, the plant diversified extensively into advertisements, fliers and high-grade paper publications.

Today, it doesn't focus on newsprint but instead on a wide variety of other paper products.

For example, it makes the paper that's turned into the bags used in fast-food restaurants, said Rob Martin, the plant's general manager.

"It will make us more flexible," Martin said about the expansion. "It's a very important day."

Resolute Forest Products was formerly known as AbitibiBowater Inc., which was created by the merger of Bowater and Abitibi-Consolidated in 2007.

In 2009, the company filed for bankruptcy protection after declining newspaper circulation cut newsprint consumption. AbitibiBowater emerged from creditor protection in 2010 and changed its operating name to Resolute Forest Products in late 2011.

U.S. Rep. Chuck Fleischmann, R-Tenn., said he took part in a reception with Resolute officials Monday night and they like the ease of doing business in Tennessee and McMinn. Fleischmann also said he likes that Resolute is adding new manufacturing jobs in the district.

"I think the future is very bright for manufacturing," he said, adding there can be tax reforms which spur more such jobs.

Garneau said the plant is "an economic engine" for the region and not just Calhoun, located about 40 miles northeast of Chattanooga.

Resolute estimates the mill affects 1,700 employees working for other companies, and that it has a $350 million a year economic impact, he said.

State Rep. John Forgety, R-Athens, presented Garneau with a U.S. flag flown over the state Capitol for Resolute earlier this month, along with a University of Tennessee orange-bound "Blue Book" of state government.

The mill, located on more than 1,700 acres bordering the Hiwassee River, currently produces over 498,000 tons of pulp and paper products on three production lines.

Specialty papers are made on two paper machines and the third line produces market pulp.

The new project is expected to produce efficiencies from better wood yield and lower steam and chemical usage. It also will increase the pulp machine's production output and maximize dryer utilization, according to Resolute.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

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