Wisconsin-based Wausau Paper signed an agreement to buy Missota Paper Co. for $9.6 million.
The deal was finalized late Friday afternoon and the closing period will take about three weeks. The northeast Brainerd paper mill will become part of Wausau Paper's printing and writing business segment.
Thomas J. Howatt, Wausau Paper president and chief executive officer, said the mill plans to hire 135 people and will look for employees with experience operating the equipment. Howatt said that experience and knowledge will be critical to a successful start for the mill.
The mill's paper machine No. 6, the higher capacity of the mill's two paper machines, will be started first. Wausau Paper announced it plans to produce up to 90,000 tons per year of premium printing and writing paper. Market factors will determine when the mill's second paper machine starts up, Howatt said. Combined, the two machines are capable of producing 170,000 tons of paper per year.
Wausau Paper produces fine printing and writing papers, technical specialty papers and towel and tissue products. The company has been in contact with PACE International Union representatives, and Howatt said they do not expect to see any change in employees represented by PACE at the facility.
The hiring process is expected to begin almost immediately to gauge the level of interest of former mill employees. Hiring decisions are expected to be made by the end of October. Wages will be determined by the labor agreement with the union.
At the Brainerd mill, Howatt said the production goal is for higher margin premium paper used in commercial printing for advertising and corporate brochures.
Howatt said the mill's assets were in good condition and were well-maintained with a modest amount of capital required for a startup. Wausau Papers will operate the mill's hydro plant on the Mississippi River.
Missota restarted the mill under difficult market conditions for uncoated free sheet paper, and as a smaller independent company its resources were limited and it did not have a strong path to market, Howatt said.
-- The company employs about 3,100 people at 10 facilities in six states.
-- The company's corporate office is in Mosinee, Wis., a city of about 4,162 people along the Wisconsin River in the central part of the state.
-- Wausau Paper Mills was started in 1899 by Norman H. Brokaw and brothers W.L. and E.A. Edmonds.
-- Mosinee Paper was established in 1910.
-- In 1920, the Mosinee Paper mill became the world's first to produce 1,000 feet of paper per minute.
-- In 1997, Wausau Paper Mills Co. and Mosinee Paper Corp. merged into Wausau-Mosinee Paper Corp.
-- In 2004, the merged company changed its name to Wausau Paper.
-- On Oct. 1, 2004, Wausau Paper bought the Missota paper mill in Brainerd.
-- In February 2003, Missota Paper bought the former Potlatch paper mill on Mill Avenue in northeast Brainerd for $4.44 million and hired about 160 workers, mostly former Potlatch employees.
-- When Potlatch closed, it left about 600 people without jobs.
-- An economic downturn hurt the young company's start. In early November 2003, Missota Paper announced an extended shutdown, noting it witnessed "constant deterioration in pricing in nearly all market segments" since the company actually started in March.
Dan Alexander, Missota Paper president and CEO, said he was pleased with the sale and the good fit for the Brainerd mill. Alexander has always expressed strong feelings for the mill and the people employed there.
"I have a very special feeling about the mill and about the people," Alexander said Friday. "I've never worked with a better group of people in my entire life. I mean that in all sincerity. They were a great group of people who tried everything in their power to make Missota successful."
Alexander said if Missota had started the mill a year later, it would have been successful in Brainerd. He said he strongly believes the war in Iraq affected the consumption of paper, and affected advertising and consumer confidence.
"Our business plan was the right business plan for the mill," Alexander said. "It was a matter of instead of the market picking up, it went down. Most people viewed, as we did, the market was poised for a recovery and our timing was going to be good. It was close but not there. We were off by a year."
Alexander said the Brainerd mill is an excellent one in terms of its condition and capability and Wausau Paper will be successful here. "It's an ideal fit for the mill."
In terms of making Missota work, Alexander said it was like dealing with a flood -- while people were filling sandbags they were faced with a tidal wave.
"... I believe in the mill and I believe in the people who worked at the mill. They did a great job for us and they deserved the opportunity."
Alexander and Jim Withers, Missota vice president, will work with Wausau for the next three months in the transition at least to get the mill back up and running.
Wausau Paper has three mills in Wisconsin, one in Ohio and one in New Hampshire along with converting facilities in Wisconsin and Kentucky and regional distribution centers in Texas and California. Most of the company's product is shipped by truck. Wausau Paper has a strong market presence and distribution abilities, Howatt said.
"We've been very successful in recent years growing our higher margin premium paper business," Howatt said, noting it has been a cornerstone of the company's printing papers. He said the Missota paper mill was available at a reasonable price and will allow Wausau Paper to expand its sales of premium papers.
Howatt said it is a long-term commitment. He pointed to Wausau Paper's company history and a successful track record with acquisitions.
"We are coming to Brainerd with high hopes," he said. "We've just been through an unprecedented decline in uncoated free sheet markets."
Howatt said that trend is slowly reversing itself and showing modest growth for the first time in five years.
"That is an encouraging sign and that's, quite frankly, why we believe it's a good time to invest."
A transition team, created from employees from several of Wausau Paper's other facilities and likely people from Missota's former management team, will work to restart the mill. A head of operations will be named later. Wausau Papers does not produce coated papers and Howatt said the restrictions on the mill against producing coated paper (left over from the sale of Potlatch to Missota) is not a hindrance.
Howatt said: "We are truly thrilled about the opportunity to operate this facility and we think it's going to be good for us and we think it's going to be good for the community."
RENEE RICHARDSON can be reached at firstname.lastname@example.org or 855-5852.
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