Domtar closes fine paper capacities and enters containerboard market

Big changes are afoot at Domtar. The company
takes a first step into the containerboard market.
14 Aug 2020 − 

Domtar is reacting to the continuing decline on graphic paper markets. The company will take 655,000 tpy of fine paper capacities from the market and convert one PM to containerboard production.

After significantly curbing woodfree uncoated (WFU) output in recent months by taking downtime in different mills, Canadian Domtar Corporation has now announced a severe cut to its capacities for fine paper. While paper production will be abandoned at the Port Huron and Ashdown mills, the WFU paper machine at the Kingsport mill is planned to be rebuilt to make recycled corrugated case material. The Ridgefield converting site is to be closed as well.

With the different measures in the US mills, Domtar will take a total of 655,000 t of WFU paper capacities from the market. The measures, which will result in a workforce reduction of 780 people, are part of a cost-reduction program that is supposed to bring $200m in annual cost-savings.

The Kingsport and Ashdown mills have already been idle since April this year and Domtar now announced that fine paper operations at the two mills would not recommence. The Port Huron and Ridgefields sites, for their part, are expected to shut down by the end of the first quarter of 2021.

545,000 tpy of new containerboard capacities

Domtar has, however, fresh plans for the Kingsport mill, where it is preparing its entry into the recycled corrugated case material market. The company intends to rebuild the PM at the site to make testliner and corrugating medium. Once in full operations, the mill would produce around 545,000 tpy of packaging paper and employ 160 people, Domtar announced. The conversion is expected to be completed by the first quarter of 2023. Domtar estimates that rebuild work will cost around $300m and $350m.

This article is an excerpt from our article on Domtar's recent announcements.

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