Sonoco invests in boilers, decides to stay in Holyoke

Date: 5/18/2010

May 19, 2010.

By G. Michael Dobbs

Managing Editor



HOLYOKE -- A long-time Holyoke employer is investing $2.8 million into its operations here.

Sonoco, which employs more than 135 people and has been in the city for 136 years, announced last week it will install two high-efficiency natural gas-fired boilers to supply steam for its papermaking process.

The boilers will create steam to replace the steam that had been sold to the company by Holyoke Gas and Electric (HG&E), which is stopping its steam production this year due to decreasing industrial demand.

Dave Schultz, the Sonoco plant manager, said, "This has been a true collaboration through a difficult time for both parties. Jim Lavelle [the manager of HG&E] and his team have been outstanding to deal with throughout this process. We look forward to continuing our longstanding partnership with HG&E and the city as we prepare for the future."

The company reached an agreement with HG&E that allowed for a "mutually acceptable exit strategy" and the company will continue to purchase electricity and natural gas from HG&E.

Roger Schrum, vice president of Sonoco, told Reminder Publications the company had considered leaving the city.

"In the midst of the recession a year ago, the plant had come under a lot of scrutiny," Schrum said.

He believes the market for the paper produced by the plant will continue, keeping the facility viable.

Kathleen Anderson of city's Planning Department confirmed Sonoco had serious concerns about the cost of the installation of the new boilers and it could have been "a deal breaker."

Sonoco officials met with city officials seeking assistance; however, Schrum said, the investment was made exclusively with company funding.

Anderson said the fact that HG&E is stopping steam production has compelled the city to look for resources to help other companies with the transition. The city recently applied for a $75 million federal grant, which would have helped businesses subsidize the cost of new steam systems and boilers.

Unfortunately, she added, the city did not receive the grant.

The city is pursuing other grants and other funding opportunities, she said. City officials recently conducted a tour of industrial projects in Holyoke for staff members of the Environmental Protection Agency and the Department of Housing and Urban Development, Anderson said, in order to introduce those federal departments to Holyoke issues.

Sonoco has the last paper operation in the city, producing 66,000 tons of uncoated recycled paperboard. It also manufactures paper tubes and cores at another location in the city that uses about 80 percent of the paperboard it produces.