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Idle paper recycling plant may not open for six more months

April 28, 2003|by SCOTT BUTKI

scottb@herald-mail.com

It will be at least six months, and possibly up to one year, before the new owner of the idle paper recycling plant in Hagerstown begins operations, a company official said last week.

The $220 million recycling plant at the corner of Memorial and Eastern boulevards, known as 1st Urban Fiber and Hagerstown Fiber, opened in October 1996 and was in operation for less than a year.

Vancouver-based Belkorp Industries bought the plant for $7.5 million at a bankruptcy auction in November 2001.

David Slater, associate vice president of Belkorp Industries, said a company estimate in February 2002 that the plant would be operational by the end of 2002 apparently was overly optimistic.

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The delay comes as the company decides which of five facilities it has purchased in recent years to start operations at next, Slater said.

The company's Internet page says the plant will "produce recycled pulp for the newsprint, tissue, and/or printing and writing industries. The start-up date for this plant is currently under review."

The company has no plans to sell the plant, Slater said.

The sooner operations begin, the sooner Hagerstown Light Department customers will benefit with reduced electricity rates, Light Department Manager Mike Spiker said.

In February 2002, Belkorp, operating as Newstech MD, accepted an electric-service contract from the city that includes a surcharge that covers the cost, plus interest, of about $2.8 million the city is owed for building an electric substation and upgrading power lines at the plant, as well as other unpaid charges, city Finance Director Al Martin said.

The 20-year contract between plant owner News-tech MD and the city also gives Newstech MD a special electricity rate, city officials said. The more power customers use, the lower rates they generally are charged by City Light, city officials said.

The contract with Newstech MD is identical to the city's agreement with the former plant owner, city officials say.

After 12 months of continuous operation at a predetermined usage level, the Light Department will receive a rebate from the city's bulk power supplier, Richmond, Va.-based Dominion Energy Marketing Inc., Spiker said.

The money from the rebate will allow the city to lower the rates that other Light Department customers pay, Spiker said.

Once running, the Hagerstown plant will produce recycled paper pulp. The pulp will be sent to another plant to be turned into paper that could be used for newspaper inserts, Belkorp officials said.

When the property was sold to Belkorp, the City of Hagerstown and Washington County governments received more than $560,000 in back taxes owed by the former owners.

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