Tuesday, December 30, 2008

Evergreen Potential Buyer Identified! Water Board Extends Services until Jan.15th!

Former Louisiana Pacific Western Division General Manager Bob Simpson came forward at today's Special Water Board meeting and identified himself as the new potential buyer of the Pulp Mill. He asked for the board to be patient and said he would have better information to present the Water Board at it's Jan. 15th meeting. His request was granted. He also said another potential buyer has been going through escrow since Oct. to buy the mill, so there is somewhat of a race.

Bob was at our plant when we achieved our Totally Chlorine Free (TCF) status and had the affluent line extended to a mile and a quarter out. He knows our operations and the risks and rewards. It was good to hear him say that he wants to keep the plant locally owned and focus on Domestic partnerships in making paper products. And I believe he was the one who endowed LP property for the Cutten ball fields. This might be a good fit.

The meeting turned out more positive in that the water is still flowing and two potential buyers are in the quick mode of purchasing the plant!

16 comments:

bull moose said...

Richard,

It did indeed sound like there is a possibility the mill could become operational again in the near future. Good news.

JMC said...

Richard
I think that it about time we thank the Humboldt Bay Municipal Water District board of directors.
With the information that they had prior to today it was almost a certain thing to turn off the water and close the Mill and the north coast forever.
I was at the meeting and understand their concerns. I feel that all of the directors are doing a good job supporting the community. Every person who lives in northern California should be thankful to them.

Anonymous said...

Our community does indeed oue thanks to the board for it's hard work to keep the mill open, that is, all of them except Kaitlin who has been doing her best to see to it that the mill is permanently shut down.

Anonymous said...

Richard,

Like I have noted in my previous post, don't give up hope. Great news today to see that someone has stepped forward and is interested in buying in mill, and who is also very familiar with the operation.

Rich, don't give up on the idea of an ESOP or other form of partnership with this individual, should he be approachable or acceptable to such an arrangement with the workforce.

You workers would have more control over your destiny and also you would have more accurate financial info to work from when making future decisions.

A partnership of management/hourly workers may give the local venders a more stable sign too, that the mill will continue to operate for many years to come.

Who knows, you guys may just keep that place from turning into a museum yet!

samoasoftball said...

6:53pm- I am hoping for the best!

Anonymous said...

401, I am no Kaitlyn fan, but the news states that it was a unanimous vote but the board, so I take it Kaitlyn for the extension.

So much for your conspiracy theory...

Anonymous said...

I have been at both special meetings of the Water Board regarding the Pulp Mill's outstanding bills. At both meetings Kaitlin Sopoci-Belknap has been an enthusiastic advocate of working with the Pulp Mill to prevent it from shutting down permanently, more so than some other board members in my opinion. She is well-informed on the issues surrounding the mill. She is an asset to the Water Board and the community.

The problem with the blogs is that ill-informed, dogmatic people such as 4:01 too often go unchallenged when they post false information.

I hope that Richard will weigh in on this.

Steve Fleischer said...

It is unlikely that in today's economic climate Simpson will be able to generate the funding necessary to restart the mill on his own.

The raw economic numbers just don't work right now. Pulp is selling for less than the mill's historic production costs. If Simpson's effort stands any chance of success, the entire community is going to have to back him in making the mill both cheaper and more economic to operate.

That means that the workers will have to do two things: (1) Take an equity stake (through a pay concession) in the new company in order to reduce operating costs and signal to investors that they are behind the venture; and (2) Mobilize their local government representatives to support the venture through regulatory relief and TARP type funds.

The local lumber mills which supply chips will have to enter into long term supply agreements at some set price that mitigates the chip price risk. That probably means taking some equity stake in the mill.

The regulators will have to agree to some standards that the mill can live with; in the past there has been an element of regulatory capriciousness that will scare off potential investors unless there is some clear understanding of what is expected going forward.

Paul Gallegos needs to reassure investors that the 12/04 environmental raid that he launched won't be repeated. Gallegos arriving with 50 armed agents representing 11 agencies sent a signal that Humboldt County is a dangerous place to invest. The risk of another grandstanding raid is sufficient to drive off any possible investors.

The Harbor District/pilots need to lower their costs. Without the mill, they are unemployed. With the mill, they earn a good living. They too need to make concessions to bring back the mill.

Washington is distributing money like drunken sailors. Local politicos need to get some of that money to save the mill. Actions will speak much louder than words.

Evergreen needs to be pushed into being a reasonable seller. In my opinion, they turned out to be less than honest; they need to give something back to the community. In return for not being pursued for an environmental cleanup (at least $25 million), they should sell the mill for $1 and agree to buy several hundred thousand tons of pulp at some above market price (a take-or-pay agreement backed by financial guarantees since their integrity has to be questioned). Lee & Man will want to come back into the U.S. market at some time; if they walk now, their ability to ever operate in the U.S. has to be questioned. If they settle their affairs properly, the option of reentering the U.S. remains open.

As an outsider watching this process, I see a lot of nice words and hopes, but other than the Water Board and a few individuals, there is very little apparent action.

By comparison, investors recently bought a pulp mill in Maine. The economics are similar to the Samoa mill, but the local Maine community worked very aggressively to get the investor funds. Those funds could just as easily have come into Humboldt County, but Maine seemed like a much safer place to invest.

The Water Board is sending all the right signals; the entire community needs to send that same signal to the possible saviors of the mill.

Anonymous said...

What is Fleischer's stake in all of this?

Anonymous said...

Yup, Kaitlin is nothing but a advocate for workers and business. She and Cobb have no agenda at all. Be serious, Kaitlin and Cobb are self serving egotists who care nothing about jobs or the economy unless it helps to further their own fundraising or political ambitions. Learn for yourselves, go to a Green party meeting. Try to attend a DUHC meeting or any of their other shams, sorry you can't attend, they're closed to anyone with an open mind. No accountability, no open books, no open meetings. 7:51, you're right, hopefull Richard will weigh in on the issue, hopefully he will investigate, discover the true facts, uncover the scams and publish them so we all can see the truth.

Fred said...

"What is Fleischer's stake in all of this?".

Who cares? What he wrote makes sense.

Not A Native said...

Good News!

Sure hope a deal is concluded and the buyers have enough financial means and cometitive knowledge to make the plant operational during both good and bad times.

Anonymous said...

Harbor District employs the bar pilots. If there is never another ship for the pulp mill they will still have jobs. Got to have them for our port just in case there is a ship ya know.

samoasoftball said...

7:51am- Yes. Kaitlin has been nothing but supportive of doing what is best for the Water District and the people who voted her in. She asks tough questions that are well thought out. The water district board seems well balanced and works good together.

Steve Fleischer is the past CEO of Stockton Pacific, the owners of the Pulp Mill before Evergreen. He lives in Colorado and is very familiar with our plant. He made a very interesting and cohesive post.

9:32am- Why are you using my blog to wage your war with Kaitlin and David?

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