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Gorham mill CEO: We survived the winter, now it’s time to grow

Union Leader Correspondent

April 23. 2014 8:47PM

GORHAM — Less than four months since laying off more than 20 employees and cutting hours for others, Gorham Paper and Tissue held a companywide meeting earlier this week where the good news was the lack of bad news.

“It is smoke, no fire,” Chief Executive Officer Michael Cummings said of the meeting he had Tuesday with employees. Cummings said that since joining the mill about a year ago, he has held quarterly meetings with employees “to share information and that’s all that was yesterday.”

“Everybody thinks that when there’s a meeting they think it’s going to be a negative announcement,” Cummings continued, “and the first thing I said is that there was no negative announcement.”

Citing the soaring price of natural gas it uses to operate its papermaking machinery, the mill in January permanently laid off 25 unionized employees, said Cummings, while reducing most of the hourly workforce to fewer than 40 hours a week, with some of the workers drawing state unemployment benefits.

The company also began exploring how to operate more efficiently. Among the things it looked at was using liquefied-natural gas (LNG) during the winter, when natural gas prices are highest.

Coincidentally, back on Feb. 11, representatives of Clear Energy of Marlborough, Mass., presented plans for an LNG plant in Groveton village in Northumberland that could produce up to 300,000 gallons per day of LNG. The plans later evolved to include two LNG fueling stations for dual-fuel trucks as well as four LNG storage facilities, one of each would be built at the Gorham mill.

A federal grant is being sought to pay for the fueling stations.

“Our mill has some extra land, and we’ve offered to let whoever wins (the contract to build the fueling stations) to place one on our property, and the benefit to us is that we would be able to use the LNG to supply natural gas to us when pipeline gas is too expensive to use,” said Cummings.

The American papermaking industry is under stress, Cummings said, and the Gorham mill is not immune.

Over the last 15 years, he said the industry has shrunk by a quarter to as much as a third, adding that “any mature industry that’s going through downsizing like ours has — because of decreased demand for newspapers, books and packaging — the least-efficient businesses fail first so we are in a race to become more efficient, making products consumers want to buy today and getting away from products consumer don’t want to buy anymore.”

Asked what’s hot in paper-manufacturing, Cummings said, “bath paper,” aka toilet paper or bath tissue.

The good news is that the mill recently purchased and installed a papermaking machine to make bath tissue, said Cummings, while another positive is that the mill is “close to where the trees are” that are used for that product.

Other blessings that the mill is counting are that “winter is over,” said Cummings.

The bottom line is, Cummings said, “We’re trying to get more business and grow and not shrink. We hunkered down and we survived the winter. Now we need to grow.”

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