AUGUSTA (AP) – Despite recent setbacks, Maine’s paper industry is not in decline and continues to represent an important segment of Maine’s economy, Gov. John Baldacci said Tuesday as he declared, “Maine is open for business.”

Baldacci gathered with paper industry and other business leaders to counter perceptions about the industry following a string of negative developments.

Last Friday, Georgia-Pacific Corp. announced plans to retire two tissue-manufacturing machines at its Old Town mill, putting about 300 employees out of work.

In January, Great Northern Paper Co., which employed 1,130 workers, filed for protection from creditors in U.S. Bankruptcy Court. A sale is in the works. Brascan Corp. has until April 21 to close a deal to buy the Great Northern mills.

Fraser Papers Inc., which is owned by Toronto-based Brascan and has a mill in Madawaska, “is anxious” to reopen the Millinocket and East Millinocket mills, Fraser Group Controller Rosaire Pelletier said Tuesday.

“We want to do business in Maine,” Pelletier said, adding “the paper industry will survive” in the state.

Dana Connors, president of the Maine State Chamber of Commerce, said that while manufacturing employs fewer Mainers, it continues to comprise a major part of the state’s economy. Connors said he senses a pent-up demand to invest in Maine.

The Democratic governor’s recently enacted two-year state budget that avoids higher taxes and keeps Maine’s Business Equipment Tax Reimbursement program intact are positive calling cards for the state’s paper industry, Connors said.

“There’s reason to hope. There’s reason to feel good,” said Connors.

In response to the Georgia-Pacific mill’s curtailment, Republican Senate leaders last week said the development was “troubling on multiple levels.”

The layoffs demonstrated that Maine’s business climate and taxes “are driving good companies to greener pastures to make ends meet,” Sens. Paul Davis of Sangerville and Chandler Woodcock of Farmington said in a joint statement. They added that Maine “cannot compete with other states that are less handcuffed by high taxes and burdensome regulations.”

Baldacci and industry leaders tried to send a different message Tuesday.

Business leaders praised the Democratic governor for his willingness to work to strengthen the industry. They said the governor’s proposed Pine Tree Opportunity Zones, which would offer incentives for business development, represent an opportunity for the industry if approved by the Legislature.

Pine Tree zones “will be a vital step” in maintaining the industry’s vitality, said John Williams, president of the Maine Pulp and Paper Association.

Maine, long a leader in the paper industry, is currently the second-largest producer of paper products in the nation, said Williams. Its success is built upon natural resources that include rivers for power and vast forests for raw materials, as well as a quality work force, he said.

While acknowledging that the highly competitive industry will get smaller in Maine and nationally, Williams said the state should take advantage of its strengths to make sure the industry thrives.

Baldacci said Mainers should not think of the industry setbacks as “a dark cloud. It’s a dark lining around a bright cloud.”

“It’s not an industry in decline,” he said.

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On the Net:

Maine Pulp and Paper Association: http://www.pulpandpaper.org/

AP-ES-04-08-03 1754EDT

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