Resolute Forest Products reassures with $105 million expansion

Resolute Forest Products reassures with $105 million expansion

March 28th, 2014 by Shelly Bradbury in Business Around the Region

The relief in McMinn County Mayor John Gentry's voice on Thursday was almost palpable.

Resolute Forest Products -- the county's biggest taxpayer and one of its largest employers -- announced it's investing $105 million into the Calhoun, Tenn., pulp and paper mill for major equipment upgrades that will also create 50 new jobs in the coming years.

It's a welcome change from other, less positive announcements from the mill -- like the one a year ago when the company shut down its newsprint machines and let 150 workers go.

"It's wonderful to see this reinvestment after years and years of tough times, and cutbacks and layoffs," Gentry said. "We were concerned about this anchor of our community. But when an industry throws this kind of capital investment back into a plant, the longevity of that plant increases. It stabilizes us."

Resolute's Calhoun plant -- formerly called Bowater -- has been a mainstay in the rural county for six decades, contributing as much as 30 percent of the county's tax revenue at its peak. But as the market for newsprint and paper products shifted, operations at the plant were repeatedly downsized.

"When you have a layoff of 150, you sort of start feeling down and not knowing what the future holds," said Kathy Knight, executive director of the McMinn County Development Authority. "But this gives us more hope for what the future holds."

About 480 people work at the plant now, and while it was founded as one of the South's first newsprint mills, the factory diversified extensively into advertisements, flyers and high-grade paper publications. And that's what this expansion is all about, the company said in a release Thursday.

Resolute Forest Products in McMinn County

Photo by Dan Henry/Times Free Press.

"This investment will make a good mill even better," said Richard Garneau, Resolute president and CEO. "It will improve the mill's long-term competitiveness by lowering its cost and giving it the flexibility to adjust grade production to changing market dynamics."

The $105 million will be spent on a modern continuous pulp digester and equipment to process wood chips, and should be complete by mid-2016. When it's all said and done, the new equipment will increase the plant's production capability, improve efficiency and allow the plant to produce specialty papers, like Resolute's Align uncoated freesheet substitutes, the company said.

Currently, the mill has the capacity to produce 609,000 metric tons of market pulp, specialty papers and newsprint, and operates three machines and a pulp dryer.

McMinn County beat out several other Resolute plants for the expansion, Knight said. The company owns or operates more than 40 pulp and paper mills across the United States, Canada and South Korea.

"Because of the decline of the newsprint industry, it was very important that we secured the expansion here," Knight said. "Wages are above the national average and they provide jobs for the region, not just McMinn County."

The county, state and Tennessee Valley Authority offered Resolute an incentive package that centered around tax cuts, money for workforce training and electrical incentives, she added.

She's confident the incentives were a good investment. Gentry said the jobs at the plant improve employees' standard of living and can be life-changing.

"There are grandchildren that are working there now after six decades," Gentry said. "The county has an identity around Resolute."

Contact staff writer Shelly Bradbury at 423-757-6525 or sbradbury@timesfreepress.com with story ideas.