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Canadian company buys Eastern Blvd. paper plant

November 30, 1999|By TARA REILLY

A Canadian producer of tissue paper has purchased a defunct paper plant on Eastern and Memorial boulevards, but it's not yet clear whether the company will operate from the Hagerstown facility or move the equipment elsewhere.

Quebec-based Cascades Tissue Group announced the purchase of the plant, Newstech MD LP, on Sept. 1. Newstech had been a subsidiary company of The Belkorp Group and part of its paper and production division.

Cassandra Latimer, deputy director of the Hagerstown-Washington County Economic Development Commission, said Thursday the county and the City of Hagerstown are in discussions with Cascades Tissue Group about the company's plans for the plant.

Latimer said she could not disclose any more information.

"I certainly hope within the next couple of weeks that things are going to be a lot clearer on the project," Latimer said.

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Hagerstown Mayor Robert E. Bruchey II said local officials are looking at what they can do to encourage Cascades Tissue Group to operate from the facility. He said he hopes the company will provide jobs that pay well if the facility should open.

Whether Cascades Tissue Group stays or goes, it is clear that it plans to use the plant's equipment.

"This transaction enables us to acquire excellent production equipment at a very attractive price," Suzanne Blanchet, president and CEO of Cascades, said in a written statement. "Over the next few months, we will use them either to improve our production of de-inking pulp or in the production of tissue paper."

The plant contains two lines of de-inking pulp, and has a production capacity of 400 tons per day, according to the statement.

The terms of the sale were not disclosed in the statement.

Cascades Tissue Group produces tissue paper for the retail, commercial, institutional and jumbo roll markets. Its products include various grades of toilet paper and paper towels. The company has four mills in Quebec, one in Alberta and nine in the United States.

Representatives from Cascades Tissue Group also could not be reached for comment, and company spokesman Hubert Bolduc was out of the office.

Belkorp officials also could not be reached for comment.

Belkorp purchased the plant at a bankruptcy auction in November 2001 for $7.5 million. It estimated the plant would be operational by the end of 2002, but that never happened, and Belkorp hasn't disclosed the reasons, according to past stories in The Herald-Mail.

"It looks like it's been dormant, I think, since the late '90s," Latimer said.

Cascades Tissue Group said in a written statement that the plant hasn't been operational since 1997.

The $220 million plant opened as 1st Urban Fiber in October 1996, and was in operation for less than a year. Bondholders seized the plant, and it was placed in receivership in 1997, when it became known as Hagerstown Fiber, according to past reports.

An involuntary bankruptcy petition was filed in December 1998 against the ownership group, Hagerstown Fiber Limited Partnership.

Newstech, with its purchase of the plant in late 2001, planned to recycle paper pulp. The recycled pulp was to be sent to another plant to be turned into paper that could be used for newspaper inserts.

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