FOUR MONTHS AFTER CLOSING, PAPER MILL REOPENS THE PARK FALLS MILL HAS PLANS TO MAKE ETHANOL FROM WOOD PRODUCTS.

FOUR MONTHS AFTER CLOSING, PAPER MILL REOPENS THE PARK FALLS MILL HAS PLANS TO MAKE ETHANOL FROM WOOD PRODUCTS.

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Four months ago, the closure of a 100-year-old bankrupt paper mill and the loss of about 300 jobs had the small, northern Wisconsin community of Park Falls reeling.

But the mood was far different Friday, with the mill soon to reopen with all the jobs being restored and new plans to establish an experimental biorefinery to make ethanol from wood products, Mayor Tom Ratzlaff said.

"Everybody is pretty happy. I think the mood in town is very joyous," he said. "Four months ago, I would never have envisioned we would have been at this point this quickly."

Reopening the mill about 100 miles northwest of Wausau is something "short of a miracle," said Patrick Schillinger, president of the Wisconsin Paper Council. It's an industry group based in Neenah representing 25 paper companies with factories in the state.

"It is so hard to bring something like that back," he said. "It really is a reversal of the trends. It is raising eyebrows."

A ceremony Monday -- with dignitaries including Gov. Jim Doyle -- officially reopens the mill with a new name, Flambeau River Papers, the mayor said.

SMART Papers of Hamilton, Ohio, filed for bankruptcy and shut down the mill in April, citing unprecedented high fuel costs and a rapid deterioration of market conditions. SMART Papers closed the mill barely a year after buying it from Toronto-based Fraser Paper.

Butch Johnson, owner of Hayward-based Johnson Timber Co., assembled a group of private investors who acquired the mill from SMART Papers with approval of the bankruptcy judge. The partnership includes paper distributor CellMark of Stamford, Conn.

Financing for the $19 million deal included a $4 million package of state loans, Johnson said Friday.

"Buying the mill was a big job. But the bigger job is to see if we can run it properly," said Johnson, who's been in the forest products industry since 1973 but has never made a piece of paper. "We don't think it is any walk in the park by any means."

One key to cutting costs and improving profits is to reduce the mill's dependence on natural gas to make steam, a big part of the papermaking process, he said. Within 18 months, the mill plans to install a second boiler that burns wood waste, eliminating natural gas as a fuel and saving between $4 million and $5 million a year, he said.

Paper prices have taken a little shot upward, too, he said. "Everything will work if we stick to our plan and continue to have some good divine guidance."

The sprawling mill sits just a block off the city's main street, dominating the downtown landscape along the Flambeau River. A yard is piled with 120,000 cords of logs -- a mountain of wood waiting to be made into paper.

For Park Falls -- a city of 2,800 carved out of a forest in northern Wisconsin and nicknamed the ruffed-grouse capital of the world -- the mill has been the mainstay of the economy for more than 100 years.

Ratzlaff, the mayor, is among the nearly 300 workers getting their jobs back -- at the same pay as when the mill shut down, he said.

About half are already back on the job doing maintenance and other startup tasks, he said.

"I am pretty excited. It is just a good feeling, a good feeling for everybody," said Ratzlaff, a color technician on one of the mill's three paper machines.

Ratzlaff said the future looks bright for the mill in part because the new owners hope to apply for millions of dollars in federal grants to establish an experimental biorefinery to explore the feasibility of making ethanol and biodiesel from wood products.

If successful, the idea has huge potential for Wisconsin and its wood products industry, he said.

"If this all works the way it's supposed to, the main product at the mill would be ethanol and paper would be a byproduct," he said.

Johnson said applications for the money will be submitted next week.

Schillinger said reopening the mill probably wouldn't have happened without the opportunity for the plant to explore a biorefinery.

"There is a lot of seed money available through the federal Department of Energy to pursue these opportunities," he said. "There are some people who say that at some point, pulp mills will be more valuable creating biofuel than pulp for paper."

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