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Area Development - Site Selection, Facility Planning and Workforce Development

McKinley Paper Upgrades Operations with State Incentives in McKinley County, New Mexico

10/28/2020
McKinley Paper, a long-time paper factory, will receive economic assistance from the state to install new equipment, retaining at least 125 jobs in McKinley County, New Mexico.

According to Cabinet Secretary Alicia J. Keyes, McKinley Paper has been reliant on the Escalante Generating Station for steam power. The 253-megawatt, coal-fired power plant near Prewitt, New Mexico, operated by Tri-State Generation and Transmission Association, closed at the end of August as the facility exhausted its remaining on-site fuel supply.

To assist the firm the State, through its Economic Development Department, pledged to invest $5 million from the Local Economic Development Act to sustain long-term operations at McKinley Paper. The plant, which reprocesses recyclable paper and cardboard into packaging containers for appliances, food and beverages, and e-commerce shippers, needs a constant supply of steam, water, and power to operate 24 hours a day to be cost efficient. The LEDA grant will go toward construction of a new boiler and associated equipment, as well as inbound water systems and wastewater treatment. The company also recycles water to use within its system.

“The main reason McKinley was situated here was because of the resources that Escalante Generating Station managed and supplied to the paper mill. Without that, we are at a very high risk to cease operations,” Wilfrido Rincon, COO of McKinley Paper, said. “Now, with LEDA, we feel we are in a very good position to maintain operations and even hire additional people. We can invest in additional assets and equipment and guarantee a steady supply of steam, water, and energy, vital to our long term operation in the state.”

"My administration has always been committed to preserving jobs in the northwestern part of our state," Gov. Michelle Lujan Grisham said. "This project and this funding was a priority, and I'm thrilled to see it come to fruition. We will continue to invest in, and support, manufacturing jobs in our state."

The LEDA investment flows from a special appropriation in House Bill 8, a measure backed by lawmakers for emergency economic assistance to McKinley and Cibola Counties as a result of the shutdown of the Escalante Generating Station, state officials explained. The LEDA project agreement between McKinley Paper and the EDD is for 10 years.

“The LEDA assistance is an investment in high-paying jobs and an investment in this community,” Cabinet Secretary Keyes said. "The new infrastructure will help sustain McKinley Paper so it can maintain, and even grow, the manufacturing workforce in northwest New Mexico."

The McKinley-New Mexico plant’s capacity is 250,000 tons a year with customer markets in California, Colorado, Arizona, and the rest of the Southwest U.S. Region, and as far East as Illinois and Indiana. The New Mexico plant also exports paper products to Canada and Mexico.

McKinley and Tri-State are negotiating the terms to provide short-term services, and for the purchase and transfer of equipment and facilities, state officials said. Following the transaction, some of the Tri-State workers who currently operate that machinery will be hired by McKinley Paper.

Tri-State is also working to support the region with $5 million in economic development assistance and by partnering with Turning Point Energy for a 200-megawatt, $200 million solar project, set to be operational by 2024.



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