Domtar spending $160M to convert paper machine at Ark. plant

Domtar’s paper mill in Johnsonburg, Pa. PHOTO Domtar

MONTREAL—Domtar Corp. is spending $160 million at its paper mill in Ashdown, Ark., to convert a paper machine to a fluff pulp line that will make absorbents used in diapers.

The project will see 330,000 tonnes of annual uncoated freesheet paper production capacity taken offline, while 516,000 tonnes of fluff pulp capacity will be added at the facility.

Fluff pulp is used as an absorbent in baby diapers, and feminine hygiene and adult incontinence products.

“The fluff pulp conversion project at the Ashdown mill is an important step in advancing our strategy to generate $300- to 500 million of (earnings before interest, taxes, depreciation and amortization) EBITDA from growth businesses,” CEO John Williams said in a statement.

“We are expanding our presence in a growing business that will allow us to support our top-tier supplier position with some of the world’s largest producers of absorbent hygiene products.”

The conversion work is expected to start in the second quarter of 2016, according to Domtar.

The cost of conversion will be approximately $160 million, the company said, with $40 million expected to be spent in 2015 and $120 million in 2016.

The company said it is also installing a pulp bale line “that will provide flexibility” to produce papergrade softwood pulp.

“Once completed, Ashdown, together with our Plymouth, (N.C.), mill will provide a platform to further strengthen our leading position as an effective producer of high quality fluff pulp with nearly one million tonnes of total production capacity,” Williams said.

The new production line is expected to enter service by the third quarter 2016.