Mill plans two-phased expansion

Blue Ridge Tissue investing $7.7 million in Patterson facility
Jan. 30, 2013 @ 08:30 AM

When Blue Ridge Tissue bought the Patterson Tissue Mill from Omni Supply Inc. in 2009, the mill was in danger of closing and forcing dozens of people out of work.

In its first year, Blue Ridge invested more than $5 million in a new tissue machine and in creating a foundation for a sustainable and growing company. On Monday, the Caldwell County Board of Commissioners approved an economic development grant in exchange for the company making another $7.7 million investment to add to the plant’s capacity and output while adding as many as six new jobs to the 40 already in place, said Caldwell Economic Development Commission Executive Director Deborah Murray.

“Blue Ridge Tissue is prepared to make a significant revitalization effort and capital investment in the plant," she said. "... They have made a tremendous amount of investment in the site since they purchased it.”

That investment includes the new tissue machine as well as a 5-mile natural-gas pipeline that eased the facility’s biggest challenge, high energy costs. Prior to the installation of the pipeline, energy costs at the plant were roughly twice the industry standard. Since Piedmont Natural Gas put in the pipeline, that cost has dropped to a far more competitive figure, which has increased the mill’s long-term viability.

Blue Ridge plans to make the new investment in two phases. The first, a $3.5 million expenditure, will cover eight to 10 projects to immediately improve quality, replace old equipment and increase productivity. The largest project will be the replacement of a warehouse area with a new stock-preparation area, where wastepaper, primarily cardboard, will be processed into recycled pulp used to make tissues. The plan is to build a new structure and install a stock-preparation system, which is expected to increase capacity by 500 percent while increasing the quality of the pulp.

Additionally, the first phase of the project will include installing a state-of-the-art tissue rewinder that will provide the quality the company needs to compete in the two-ply tissue market. The $900,000 upgrade will allow future increases in capacity on the tissue machine. Another $400,000 will be spent on a new quality lab, a new stretch wrapping system, a high-capacity filter for incoming river water, replacement of the water intake on the company’s dam, new security and fire-alarm systems, and high-efficiency lighting throughout the facility.

The county grant also will be implemented in two phases as the company moves forward. Local incentives for the project’s first phase are $2,000 for each of the six jobs created over the next year and a 75 percent tax grant on the value added to the facility’s existing tax base for the next five years. The tax grant means that for that five years the company will pay property taxes on just one-fourth of the amount by which the investment increases the plant's assessed value. Afterward it will be taxed on the full assessed value.

The second phase of Blue Ridge’s plan, expected to be implemented within the next two years, calls for the  replacement of the dry end of the company’s tissue machine, which will more than double the current productivity of the machine. Another possibility in this phase would be the replacement of the existing building with a bigger building. The estimated cost for the second part of the plan is $4.2 million. There are expectations of additional jobs in Phase Two, but Blue Ridge officials say that number has yet to be determined. The final incentive structure will take shape once that job figure is determined and will also include a 75 percent tax grant.