FRANKLIN—Two companies remain interested in using portions of the International Paper’s Franklin mill, while another has begun negotiations to use the site, said Isle of Wight County Economic Development Director Lisa Perry.

Perry couldn’t release additional information about the negotiations that started a week ago.

“I can’t speak about the details of that,” she said. “It’s another worthwhile co-user.”

Franklin Pellets, a company co-founded by businessman and former Virginia gubernatorial candidate Terry McAuliffe, announced in April 2011 that it planned to use a portion of the mill to produce wood pellets. Those plans are on track, business partner Peter O’Keefe said Thursday.

“We’re moving forward and we hope to have an announcement soon,” O’Keefe said.

Tak Investments, the parent company of ST Paper, also plans to use the mill to produce tissue products from post-consumer, recycled fiber using on a modified paper machine.

Both companies are in the planning phase, which can be a lengthy process involving engineering to retrofit existing equipment for other uses, Perry said.

“It’s quite complex,” she said.

Perry hopes one of the companies will be ready to move in by early fall.

IP’s repurposed mill became operational earlier this month to produce fluff pulp used in diapers. IP closed the mill in 2010, cutting 1,100 jobs. The mill now employs more than 200.