By Kathryn Skelton,Staff Writer

Steve Eldridge had been Rumford town manager two weeks when MeadWestvaco sold its paper mill early this year.

“It made me very nervous. It makes everybody nervous when the mill changes hands,” he said recently. “People wonder, because it’s an investment firm, somewhere down the road it might get sold. We don’t know if NewPage is in for the long haul or not.”

There’s reason to be edgy.

NewPage, owned by Cerebus Capital Management, officially bought five MeadWestvaco mills in May.

One may be for sale already.

In an interview with the Dayton Business Journal in June, NewPage’s chief executive officer said the Chillicothe, Ohio, mill might go on the market, and the entire company might be open to consolidation.

It’s against that backdrop people are watching the impending sale or spinoff of International Paper’s mills in Jay and Bucksport, which IP announced in July.

There are two scenarios, said John Williams at the Maine Pulp & Paper Association:

• The buyer is a small company, which makes the mills an important holding. But if it’s too small there’s a risk of too little capital for future investments or lack of interest in the long term.

• The buyer is a large company with money to invest and strong interest in staying put. But if it’s too big there’s a risk of consolidation, mothballing parts and losing employees.

Williams is rooting for a NewPage scenario: new name, same workers.

IP’s summertime announcement surprised many.

“I do think it sends a message Maine is a place they can do without,” said Lloyd Irland, an industry analyst in Winthrop. “There will definitely be companies interested. It can’t be all bad.”

Several people suggested SAPPI – with mills in Westbrook and Skowhegan – is a likely candidate.

SAPPI is already comfortable doing business in Maine and one of its new vice presidents of manufacturing operations has longtime roots with IP, said Jim McNutt at the Center for Paper Business and Industry Studies.

SAPPI is the largest coated paper maker in the world; both IP mills make coated papers.

The Androscoggin Mill in Jay employs 1,000 people. “That particular asset, in the right hands, can make a lot of money,” McNutt added.

A SAPPI spokesman declined to comment on that company’s interest.

“I wouldn’t want to speculate,” said Jay spokeswoman Fiona McCaul. “I think (SAPPI) is a strong business.”

McCaul said a corporate decision to spinoff or sell five coated paper mills, of which Bucksport and Jay are two, is expected by March 31, 2006.

If the decision is made to sell, “I wouldn’t be surprised if we see some Canadian companies in the room” expressing interest, Irland added.

In Rumford, Eldridge said the transition from MeadWestvaco to NewPage has been smooth, but there’s still concern.

The region’s trying to become less dependent on paper for jobs and taxes, seeking other opportunities.

“We all live in that fear when you have such a huge part of your economy” tied up in one place, Eldridge said.

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