As part of an effort to rid itself of equipment no longer being used at the mill, Sappi has reached an agreement to sell components from the Westbrook mill to a Mexican company.
Jeffrey Pina, director of corporate communications for Sappi North America, said the company has reached an agreement in principle to sell the mill’s pulp and bleaching equipment as well as a chlorine dioxide plant to HSB International, a company in Mexico City that, according to the company’s Web site handles specialized engineering services for the pulp and paper industry. Pina said Sappi expects the sale to be final sometime in August when Sappi would begin to remove the equipment to be shipped to Mexico.
The equipment will not be staying in Mexico very long. Pina said HSB is purchasing the equipment for their client, Seshasayee Paper and Board Ltd. of India.
While the equipment is no longer being used at the mill, the fact that it is leaving the city is a blow for Westbrook. Under Maine’s personal property tax laws, the city collects tax on all business equipment in the city, whether it is being used or not.
City Administrator Jerre Bryant said next year’s budget would reflect the loss of tax revenue. “That’s a big valuation loss for the city,” he said. He said the city would not know the exact amount of tax money lost by the sale of the equipment until the tax bills go out next year.
The sale of the equipment continues a recent trend for the Sappi mill, as the company continues its efforts to shrink operations at the site. Bryant said last year the company sold one of the large paper making machines it had recently shut down. He said that machine, which he said was valued for tax purposes at $5 million, represented about $100,000 in lost tax money for Westbrook when it was sold. Bryant said the loss was equivalent in value to a 20,000 square foot office building.
When the mill was in full operation, Bryant said it represented a major part of Westbrook’s tax base, sometimes as high as 40 percent of the city’s overall valuation. He said the mill now represents about 4 percent of the overall value in Westbrook.
Bryant said he doesn’t fault Sappi for looking at ways to save money, especially by getting rid of equipment they no longer need. “While it’s not good news for the city, it makes significant business sense,” Bryant said.
The recent sale of equipment to international companies is a trend that Sappi is looking to continue. Pina said Sappi is also in negotiations with a Bulgarian company regarding the sale of a recovery boiler, which he said is obsolete. While negotiations are still ongoing, Pina said the two companies are “a ways apart on price.”
Sappi Fine Paper has announced it is selling equipment the company is no longer using in Westbrook to a Mexican company. Staff photo by Mike HigginsSend questions/comments to the editors.
