LINCOLN (AP) – Lincoln Pulp and Tissue LLC will begin construction within a few weeks on a $36 million tissue machine, the first major upgrade to a paper or tissue mill in Maine in 15 years, company officials said.

Without the upgrade, the mill would be in “difficult straits in the next few years,” company owner Keith Van Scotter.

The new machine that makes 100 tons of tissue per day will double production capacity when it goes online next August, said Doug Walsh, the company’s executive vice president of operations. Two existing machines already produce 50 million tons apiece.

Van Scotter and his partner, John Wissman, saw the need to expand at a convention last October when would-be customers approached them.

“We did not have capacity to sell to them, but we could see that there was a niche here to create additional market capacity,” Van Scotter said.

A $35 million investment was announced Friday by PCG Capital Partners of La Jolla, Calif., the private equity investment arm of Pacific Corporate Group LLC. As part of the deal, the company will name two members of Lincoln Paper’s board of directors.

Providing more details on Monday, Van Scotter said the plant will hire about 40 workers, and company officials will apply for tax relief to alleviate some of the $794,000 increase in property taxes the new machine will generate.

Plans call for the Metso Paper Inc. machine to be housed within an 80-foot by 200-foot building to be built next to Lincoln’s existing tissue-making machines, Van Scotter said.

Spirit Construction of Savannah, Ga., and Green Bay, Wis., will oversee the building of the machine, which will be fabricated at several locations worldwide, including plants in Sweden and Italy, for assembly in Lincoln, Van Scotter said.

The Maine Department of Environmental Protection approved building plans within the last few months. Construction permits are expected shortly, Van Scotter said.

Lincoln Paper rose from the ashes of the abandoned Eastern Pulp and Paper Co. when Van Scotter and Wissman completed their $23.7 million purchase of the plant in May 2004.

Seen by many as the key to the region’s economy, Lincoln Paper employs about 350 workers at its Katahdin Avenue paper and tissue mill. It is the area’s largest employer.

The Metso Paper Inc. machine represents the first massive upgrade since improvements made to a Skowhegan mill in 1990, Van Scotter said. It’s the first new tissue maker since one was installed at the former Eastern Pulp and Paper Co. site since the 1970s, he said.

AP-ES-08-30-05 1800EDT

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