After Years Of Struggle, Gorham Paper & Tissue Is Paying Off Debts

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Christopher Jensen photo

For more than a decade, the paper mill in Gorham has struggled to survive.

By Christopher Jensen
InDepthNH.org

After years of accruing debt, Gorham Paper & Tissue – the last operating paper mill in the North Country – is paying it off, according to local officials.

The largest amount is $1.1 million owed to the town of Gorham going back to 2013, says Christopher Boldt, a lawyer for the town.

The company is now making weekly payments of $10,000 on the debt. In addition, it is paying $5,000 a week to cover 2016 taxes, Boldt said.

In exchange, the town is reducing the value of the plant from $13 million, an amount the company has disputed, to $9 million. In the summer of 2018, the parties agree to reconsider that amount, according to the agreement between Gorham and the plant.

The town is also waiving about $225,000 in interest, Town Manager Robin Frost has said.

The deal includes settling the company’s suit against the town challenging the $13 million assessment.

“It is a good resolution of a long-standing bit of litigation,” Boldt said.

Refuse district debt

The company still owes about $766,000 from 2013 and 2014 to the Androscoggin Valley Regional Refuse Disposal District, said Sharon Gauthier, its executive director.

That includes about $237,000 for landfill fees and $529,000 for purchasing methane gas to help run the plant, Gauthier said.

But the company has paid off $266,000 owed from 2015, is current on 2016 fees and is chipping away at the $766,000, she said.

State loan guarantee

In 2012, the plant got a state guarantee on a $10 million bank loan to help purchase a $35 million paper machine it said was necessary to be competitive.

The company is up to date on repaying that loan, Business Finance Authority Executive Director Jack Donovan said.

For more than a week, officials at Gorham Paper & Tissue have not responded to requests for comment.

In 2011, when it appeared foreign competition had doomed the plant, it was purchased and reopened by Patriarch Partners, a private investment firm based in New York.

By June 2012, about 210 workers were back on the job, officials said at the time. But the company admitted struggling with energy costs and in 2014 some workers were laid off.

Earlier this year, plant manager Dick Arnold told New Hampshire Public Radio that there were about 90 workers on the job.

The plant is focusing on tissue paper and paper towels such as those found in the bathrooms of restaurants and office buildings. They are sold under “private labels,” which means a store puts its name on the label.

Gorham is “diverse in terms of where its tissue paper goes” so it is in a good position, said Greg Rudder, the lead editor of PPI Pulp & Paper Week, a trade publication. But North America is also an extremely competitive market, he said.

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