Papermaking returns to St. Francisville mill

By James Ronald Skains
Journal Correspondent

It is virtually unheard of to have a paper mill shut down, go through a change of ownership then through a bankruptcy and wind up with a new owner who successfully reopens and operates the mill. But that is what happened in St. Francisville, Louisiana--a roller coaster ride that has stabilized into a win-win situation for all parties.

The Piney Woods Journal was able to sit down with Mill Manager Dan Perkins, and Vice-President of Administration Michele Conrod with KPAQ Industries, LLC, and find how this financial phenomenon occurred.

"What is making things happen positively now is that we have an excellent work force that approaches each day and each task with a can-do attitude," Perkins acknowledged. "We have cross trained a lot of our 270 person work force for different jobs, so when we move people around, they accept it as an opportunity to meet a challenge."

"It was an up and down tense scenario for quite some time after Timbec shut down and the West Feliciana Partners (WFP) were able to purchase the property and reopen the mill," Perkins elaborated. "I came aboard about three months before major problems began to occur with WFP and the Flour Company that was going to operate the mill. We actually ran out of wood a couple of times."

"Eventually, the Company went through bankruptcy, and was bought out of bankruptcy by the Senior Note Creditor, Amzak Capital Management," Perkins noted. "That was when the big turnaround occurred."

"I had worked for Amzak Capital Management for nearly 20 years," Michele Conrod explained to the Journal. "Prior to this venture into the paper industry, Amzak Capital Management had concentrated on cable TV and communications systems."

"My work with Amzak Capital had carried me all over north and central America and the Caribbean helping set up communication systems," Michele elaborated. "When Amzak bought the paper mill, my husband, Dale and I were asked if we would like to move to St. Francisville from South Florida to help run a paper mill."

Dale Conrod is the KPAQ procurement manager.

"This was a huge challenge for us both career wise and culturally," Michele explained. "But we now both love south Louisiana and helping operate a paper mill."

KPAQ Industries, LLC currently produces three primary products: 1. Lightweight Linerboard 22.5#/110 gsm to 35#/170 gsm. 2. Paper bag 60# to 80#. 3. Unbleached Market Pulp. KPAQ has four paper machines at the mill, two of which date back to the early 1960's.

(The numbers refer to grams per square meter--gsm, the industry designation of the product's weight and density. Ed.)

"We started up paper machine No. 1 in April 2010 and brought machine No 2 on line in the summer of 2011," Perkins pointed out. "We consume about 1.2 million tons of raw chips each year and produce about 240,000 tons of finished products annually."

"We don't have any chipping facilities onsite," Perkins noted. "We have a contract with the Price Companies who have a chip mill in Gloster, Mississippi.''

"About 80% of our chips come from Gloster and we buy the other 20% from various sources," Perkins said. "We probably average using about 700 tons of chips a day."

The KPAQ mill is located on LA 964 just off Highway 61 near Thompson Creek which crosses Highway 61 about seven miles south of St. Francisville, and 20 miles north of Baton Rouge. The mill sits not far from the Mississippi River in the southeast corner of West Feliciana Parish.

"When Mike Kamza, the principal of Azmak Capital bought the mill, he knew nothing about the paper industry, but liked the business model that had been developed for the mill," Michele explained. "Mike is a great guy to work with and although he is headquartered in Florida, he is on site here at the mill quite often dressed in jeans and boots so he can get a firsthand look at all aspects of the mill operation."

"The paper market from our standpoint has stabilized and we are moving forward to increase our market share," Michele noted. "We've hired a national sales manager, Mike Butler, who has many years in the paper business."

The Journal was able to talk with the new KPAQ national sales manager during our visit to the mill. Butler had this to say, "I live in Virginia now but in six months I'll be a resident of Louisiana. From what I've seen so far, I think south Louisiana grows on you pretty fast."

"I'm really excited to be part of such a dynamic organization as KPAQ," Butler added. "I believe there are a lot of opportunities out there for us in the paper business."

"In addition to bringing in a sales manager, we also have a new CEO, Bob Boschee, who will be on site full time shortly," Michele pointed out. "Bob is a veteran of many years in the liner board business; so we're definitely moving forward in an exciting right direction."

"Another advantage that we have with our work force is that it is very diverse both in age and experience," Perkins elaborated. "About 20% of our workforce was with Timbec when they operated the mill. About 60% was with WFP when they operated the mill and the other 20% are new green hires within the last two years."

"Our entry level positions pay $14.17 per hour plus standard benefits," Perkins acknowledged. "Our top positions pay $28.00 per hour which makes our average work force pay at around $20.00 per hour."

"Another thing that is working real well for us is that we pay bonuses every six month instead of on an annual basis," Perkins explained. "In all fairness to our work force, we may have a good six months but the whole year is not so good which would drag down the average bonus."

"Our bonus system seems to add to the can-do attitude around here," Perkins added. "We also try to show respect to our work force by emphasizing safety first. Wes McIntosh is our Safety Director."

"We are constantly trying to improve our operations," Perkins noted. "We generate about 50% of our power through the use of black liquor (a carbon rich byproduct of making paper) and natural gas, with the other half coming from Entergy."

"If the black liquor renewable energy tax credit was still available, that would be a boon for us allowing us to make improvements faster," Perkins added. "In fact, the Black Liquor tax credit was really what made it economically feasible for the WFP to initially start the mill back up after the Timbec shutdown."