A Maine Paper Mill’s Unexpected Savior: China
OLD TOWN, Maine — During the deepest part of last winter, a van pulled off the highway and followed the two-lane road that skims along the Penobscot River, coming to rest beside the hulk of a shuttered pulp mill. The van’s door slid open and passengers climbed out: seven Buddhist monks from China.
Andrew Edwards, a mill superintendent from the nearby town of Lincoln, led them to a room where he had stockpiled the things they had requested for the ceremony: oranges, limes, apples and seven shovels, one for each monk.
Snow lay deep on the ground, two feet of gritty, frozen crust, and he remembers worrying a little about the visitors. “They were in their, I don’t know what they’re called, their Tibetan outfit,” he said. “With the sandals and whatnot.”
He stepped back and watched as the monks wandered from the boiler houses to the limekiln to the pulp mill, chanting, burning candles and gently tapping a gong.
Mr. Edwards had grown up beside a now-defunct mill, and seen the human chaos that resulted from failures and bankruptcies — the foreclosures, the layoffs, the departures of young families.
So he had every reason to be curious about the new boss. Zhang Yin, known in China as the “Queen of Trash,” had built an empire, Nine Dragons Paper, by producing corrugated board out of recycling scrap. She was different from the American owners who preceded her, and not only because she could afford to spend lavishly on feng shui.
The most startling thing about Ms. Zhang was her promise that Nine Dragons would operate the mill for 100 years, long enough to employ Mr. Edwards’s children and grandchildren.
“People don’t go back and redo these mills, they just don’t,” Mr. Edwards said. “Mills get torn down or scrapped out. And here’s Old Town in the middle of it, coming back to life.”
The year 2019 was, by any measure, a disastrous one for the relations between America and China.
President Trump steered the United States into a trade war, bringing average tariffs on Chinese goods to 21.3 percent, up from 3.1 percent when he came into office. Americans’ opinions of China turned sharply negative, sliding to the lowest point since the Pew Research Center began recording them.
But a different story was unfolding in this battered New England mill town, population 7,500. The Chinese government had cut off the import of American recycling, jeopardizing the supply lines that fed Nine Dragons’ broader business. To keep its paper plants humming, Nine Dragons needed this mill.
And the Old Town mill, cast aside by a parade of short-term investors, abandoned to the elements, needed a savior. No amount of trade-war bluster would change either of these things.
Along with gratitude came a tinge of apprehension, a sense that unpredictable change had come to the north woods.
“You want my honest opinion? This country is being recolonized by Asia,” said Katie Bosse, 77. She had grown up, as she put it, “under the stack,” the daughter and granddaughter of millworkers, and had a Mainer’s suspicion of outsiders.
“Most people who do this do it out of greed,” she said. But she had spotted the site manager for Nine Dragons lingering at the back of the crowd and wanted to catch him. Because this was also true: Finally, after so many years, there was opportunity to be grasped in Old Town.
She dashed back to see if she could snag a job for her brother.
A Struggling Town
David Mahan, the president of Old Town’s City Council, was in his truck, collecting empty bottles for his bottle redemption business, when he heard there was a buyer.
One owner after another had given up on the 130-year-old pulp mill, which had contributed about $500,000 annually to the city’s tax revenue, said Bill Mayo, Old Town’s city manager. It shut its doors for good in 2015.
The mill sat empty for three winters, and holes opened in the roof. Animals sought shelter there. Most people in town expected it to be sold for scrap.
The city’s spirit flagged, as the crime blotter documented drug busts and methamphetamine labs. The City Council, struggling to fund services from a dwindling tax base, agreed to cut 20 municipal jobs. Mr. Mahan had even talked about phasing out trash collection, a service that costs the city around $330,000 annually.
“I think we hit rock bottom at a certain point,” Mr. Mahan said.
Then came a call about the mill.
“You need to come back right now,” the liquidator told Mr. Mahan. Once he had parked and taken a seat in a conference room at the mill, he dialed into a call with someone he had never met: Brian Boland, vice president of government affairs at ND Paper, which already owned one pulp and paper mill in Rumford, 125 miles to the west.
Mr. Mahan was stunned.
“I’m going, ‘ND Paper, are you kidding me?’” he said. “Then Brian says, ‘Yes, ND Paper, we’re affiliated with Nine Dragons.’ I went, ‘Whoa, O.K.’ Once I heard that name, I was like, ‘O.K. We’re in a very good place right now.’”
If demand for pulp had wavered in the United States, it was building in China. Nine Dragons is Asia’s largest producer of containerboard, which is used to make cardboard boxes and packing material. Its founder, Ms. Zhang, amassed her vast fortune by exporting recycling scrap from the United States, and then breaking it down to pulp that could be made into boxes.
That business model was shaken in 2018 when the Chinese government sharply limited the import of American recycling scrap, in a policy known as the “National Sword.” Paper manufacturers began searching for new sources of virgin pulp, which can be exported under lower tariffs and mixed with lower-grade fibers from Chinese scrap to strengthen cardboard.
And that decision had sent ripples all the way to Old Town, where Nine Dragons announced an initial investment of $45 million. Mr. Mahan watched as the mill became a hive of activity. Four hundred and fifty contractors began showing up daily at the mill, and a pizza shop opened on Main Street. When the company began interviewing candidates for 130 jobs, 1,200 people applied.
ND Paper, the company’s United States affiliate, seemed to bend over backward to win the good will of the community. It sponsored Little League teams, underwrote the Memorial Day and Riverfest parades, bought canoes from the town’s other large employer, Old Town Canoe, to give out as raffle prizes.
“We were short that money, but now, this year, it’s almost like being dropped from heaven,” Mr. Mahan said.
A Dazzling Party
Anyone worried that Nine Dragons was another short-term owner found it reassuring to watch its investment in landscaping.
The company had flown its feng shui consultant, known within the company as “Feng Shui Eddie,” from Hong Kong to look over the mill complex.
There were problems. The mill property was abutted by a cemetery, a slope covered with gravestones of 19th-century millworkers. This was inauspicious, Feng Shui Eddie advised, because it allowed restless spirits to peer into the factory grounds.
He ordered a high, 2,000-foot fence erected along the perimeter of the cemetery. Behind it, the mill staff planted a row of 230 saplings — peach trees, specially selected for their ability to withstand a Maine winter.
“It was like belt and suspenders,” said Craig Kerschner, the mill manager. “The peach trees are another added layer to keep them over there, to keep the spirits in their own space.”
He added, “It’s all about keeping them on their side.”
If these alterations prompted amused chatter in town, the mill employees took them seriously.
“It’s something they strongly believe in, and we support them 110 percent,” said Randy Chicoine, ND Paper’s General Manager for Maine Operations. “Our folks are very understanding of it.”
At 2 p.m. on a sunny afternoon in August, Ms. Zhang — known reverently within the company as “Chairlady” — walked into the Old Town mill for its grand opening. She was small and twinkly, wearing a knitted Chanel-style suit woven with gold thread and patent-leather shoes with gold details; inside her collar was tucked a strand of marble-size gemstones.
She was followed by a retinue of family members, many of whom work for her. Ms. Zhang’s father, a military officer, was branded a “counterrevolutionary” and imprisoned during the Cultural Revolution. They were poor, and she had to go to work at a young age, to support her seven younger siblings.
In 2006, the year Nine Dragons went public, she was ranked the richest person in China by the Hurun Report.
“My sister hates lazy people the most. She is always energetic and more diligent than any other person I know,” one of her sisters, Zhang Xiubo, told China’s state-run press agency. “We obey her unconditionally.”
Inside the warehouse, the company had erected a white tent, fitted with decorative light fixtures and humming air-conditioners. A row of Maine’s most prominent politicians was seated on the dais, beside Ms. Zhang, and the first rows of folding chairs were occupied by dark-suited Chinese executives. On screens near the stage, time-lapse drone footage sped through months of restoration work.
Ms. Zhang got to her feet, her face barely visible over the lectern. “In China, we have a common saying: ‘Separated as we are, thousands of miles apart, we come together by predestination,’” she said in Mandarin, as her son translated. Mr. Mayo presented five keys to the city — to Ms. Zhang, her husband, son, brother and nephew — and the politicians stood to celebrate the mill’s reopening.
“The paper industry in Maine is coming back,” Senator Angus King announced. “Why is this important to Maine? Because trees are what we’ve got.”
After that, millworkers got up, one after another, to pay tribute to Ms. Zhang.
A mill shutdown “leaves an awful hole in you that doesn’t go away for quite some time,” said Michelle Fisher, a logistics supervisor, who had lived through six.
Then she turned her face to Ms. Zhang, whom she called “our Chairlady.”
“I don’t think we will ever be able to say thank you enough,” she said. You could almost smell the longing in the room: Please, let it work this time.
An Edge of Mistrust
Not everyone in Old Town was part of the celebration.
Northern Maine is Trump country, rural and deeply scarred by the collapse of manufacturing. Derek King, a real estate developer, was drawn to Mr. Trump because of his tough line on China. He said he had watched joint ventures form in the north woods and that they were not always fair, with Chinese investors pressuring American partners to share technology.
“I think they’re ripping us off, and I think they know it, and it bothers me,” Mr. King said.
It did not sit well with Mr. King, the way Old Town’s leaders were handing keys to the city to a Chinese tycoon. But Mr. King owns a residential property directly across Route 2 from the mill, and, in its revival, he sees a market for new housing units.
“I feel a little hypocritical at times for being excited that they’re here,” he said. “At times I almost feel like the community, the state, is prostituting itself to get 130 good jobs in here.”
Duane Lugdon was not part of the celebration, either. Now 65, he had served for 22 years as the union representative at the Old Town mill, Local 80 of the United Steelworkers. With its acquisition by ND Paper, the mill became — for the first time in decades — a nonunion shop.
It bothered Mr. Lugdon that the mill would now be loading much of its pulp onto cargo ships headed for China, to be fabricated among Nine Dragons’ eight mills there.
“The Chinese want these paper facilities for one reason,” Mr. Lugdon said. “Remember, what they want is the fiber. They don’t have any. That’s the issue in China. They have to get their trees somewhere else.”
But he was careful about what he said because he, too, wants it to work.
“It sat idle for three years because nobody wanted to commit the dollars,” he said. “The fact that the Chinese have done it, that’s a wonderful thing. If you think of it from the perspective of being dead, it’s no longer dead.”
And with this, he said, begins a new period, of foreign ownership. “It’s something we hadn’t seen in this country in 100 years, but we’re seeing it now,” he said.
‘Squeezing the Life Out of It’
As the new year began, the mill still bore a bright two-story banner that read “Old Town, New Beginning.”
The mill restart had proven a struggle, as the new owners grappled with equipment that suffered from years of neglect, said Mr. Kerschner, the mill manager.
He sat in front of his window, as gusts of snow spiraled outside in a bitterly cold wind. The sun sank below the horizon at midafternoon, just after 4:30 p.m.
“They were squeezing the life out of it before,” he said.
The ambitious two-year goal declared at the grand opening — to convert the mill from hardwood to softwood, and then scale up pulp production from the mill’s former yield of 150,000 tons a year to 270,000 — is still far off.
The mill is still ramping up, producing about 200 tons a day, Mr. Kerschner said. He said he hoped to bring production up to the pre-shutdown level early this year.
“We’re right on the verge now,” he said. “Every day you can feel we’re right on the edge of what needs to occur.”
The holidays were approaching, but Old Town’s small commercial strip was desolate, its single popular restaurant gutted by a fire. The town was watching the mill, to see if the new owners would be scared off, like the ones who came before.
Dan Smart, 63, who logged 39 years at the mill and then returned for a few months to work security, said that, on the contrary, the new owners seemed to have limitless patience. They assigned double crews, month after month, as technicians worked to bring the boilers back into operation.
“In the past, if something wasn’t running in a hurry, someone was panicking,” he said. “That money they have is a bottomless pit.”
He concluded, eventually, that the panic is not coming. “That threat seems to be gone with this outfit,” he said. “They’re in it for the long haul.”
Cathy Cashman, now 64, had started there when she was 22. The mill’s history was her history.
She was there when a worker killed himself by jumping off the roof, and when a couple, who both worked there, married outside the converter. At one point, she gave her co-workers instructions for some eventual day, to scatter her ashes from the roof of the recovery boiler. The new owners did not hire her back, and this made her bitter.
Still, as the new year began, she fretted about the restart in a way that was almost protective. She made it a point to count the stacks, just to see where the steam was coming from, ticking them off one by one. The recovery boiler, the limekiln, boiler No. 5, boiler No. 6, the digester room.
A few days ago she saw something she had not seen before, steam coming out of the kraft mill. And it gave her a gust of hope.
“You want it to succeed,” she said. “It might bring Old Town back to life.”
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