Rumford Branch, RUPO / PORU

Is this Q1 2023 mill closure at Jay a significant business loss for CSX? Maybe CSX saw it coming as a consequence of the pulp explosion a few years back?
https://www.newscentermaine.com/articl ... 8t1uflhado

Rumford branch traffic mostly split between Pixel at Jay and ND paper at Rumford with both
mills having switch crews assigned to them. PORU/RUPO typically has 40-60 cars, up one day
and down the next with an occasional skip day. Doesn't look good for long term viability for
the branch. Other traffic is minimal with a chicken feed mill at North Leeds, a scrap yard at
Livermore Falls and once in a blue moon deliveries of structural steel at Dixfield. Pixelle had
a lawsuit going against an engineering firm regarding the digester explosion. Had hoped a
win might finance the rebuilding of the pulp mill but then Pixelle was purchased by H.I.G.
Capital last May and that may have fueled a reassessment of the mills future.

This is the type of situation in which Guilford historically would have sold the branch to the state, which in turn would hire another entity to operate it. Guilford drops off loads / picks up empties, and the shortline operator hauls them to and from the mill(s). CSX could conceivably do the same thing. Probably not right away, though: they'll want the significant scrap and dirty-dirt traffic that results from the Jay mill being dismantled.

I wonder what the likelihood is of another company stepping in and keeping it running like ND Paper did at Old Town? I’m sure it would sell at a discounted price and the state would undoubtedly provide financial assistance.

H.I.G. owns my company too, that stinks.

Chances of someone else like ND scooping it up?

Best case scenario is a forest products company getting ahold of it. Time and time again, when investment firms buy these mills, they want to do nothing but take the money and run. The only way to keep it running long-term is for a company actually interested in paper to purchase and make necessary upgrades, especially since this one needs an entirely new pulp mill. Time for the powers that be to get on the phone with ND, SAPPI, Irving, etc.

Could ND run a pulp shuttle from Rumford or do they already have excess paper capacity there?

In the period immediately after the explosion Pixelle was buying some pulp from ND Paper in
Rumford- don't know if they were using rail or trucks. ND Paper bought the Rumford mill because
they needed a source of pulp for their own operations ( or so they said- the previous owner had
stated the same reason for the purchase ) so that may not have been a viable long term supply.
I have observed a local trucking company making routine round trips from NEPW in South Paris
to Pixelle and I suspect that the cargo is pulp.

How realistic is it that another operator may try to purchase the mill? Aside from the digester, the mill's equipment is overall in good shape and there's rising demand for the type of paper packaging materials the mill produces.

That's the million dollar question. If Pixelle couldn't make a [big enough] profit while using pulp brought in from offsite, what are the chances that another company could make a go of it and get better results? I don't know the answer. I do feel like we've seen this movie many times before, where different companies come in with big promises of being able to do something the previous company couldn't do, and then two to five years later we're reading about layoffs the week before Thanksgiving.

Unless someone rebuilds the pulp machine likely the only one who could financially make a go of bringing in is ND because of their proximity. I hope someone grabs it.

My understanding as of this morning is there are already multiple parties interested in making an offer on this plant... cross your fingers.

Be nice to not have another Bucksport. "Oh you're interested? Too bad, we already sold it at scrap value."

The digester is basically just a large pressure cooker and not particularly complicated. A
possible buyer would add into consideration that all the support infrastructure is already
there- the wood yard, conveyors, boiler, etc. It's not like they would have to build a
complete new pulp mill. There is also a lot of pulp wood available nearby. The big thing
is that market pulp is a commodity these days and each mill has to weigh the cost of
manufacturing to pulp themselves or buying (and transporting) it on the open market.
Given the fact that there aren't a lot of pulp mills left in New England anymore that means
sourcing it from Canada or down South. Pixelle is moving Jay's production to other mills,
giving me the impression that for Jay to survive pulp production needs to resume on site.

On a different note RUPO left Rumford this afternoon with 37 cars- here is a shot of them
passing through Peru with 506-503-353.

The design of this plant did not take into consideration any loss of the pulp production beyond just routine maintenance shutdowns… but someone to scoop up this plant with a more “modern” fully integrated in line design could certainly get it back to complete operation without having to greenfield a plant, so there is considerable upside there. The real questions are would Pixelle be willing to sell it and for how much…