Domtar to permanently shut two paper machines in U.S. affecting 100 workers
The Montreal-based company says the closures were necessary due to declining demand and increasing imports of copy paper
FORT MILL, S.C. – Domtar Corp. says it will permanently shut down two paper machines at U.S. mills, affecting about 100 workers.
The closure at the pulp and paper mill in Ashdown, Ark., will take effect immediately while the move at the paper mill in Port Huron, Mich., will be completed by mid-November.
The Montreal-based company says the closures which will reduce annual uncoated freesheet paper capacity by about 204,000 tons was necessary due to declining demand and increasing imports of copy paper.
The Ashdown mill will continue to operate one paper machine that employs about 725 people and a fluff pulp machine with the flexibility to produce softwood pulp depending on market conditions.
The Port Huron mill will continue to produce technical and specialty papers using three machines and employing about 212 workers.
Analyst Paul Quinn of RBC Capital Markets says the closures represent about three per cent of North American uncoated freesheet supply and “should result in modestly tighter operating conditions in 2020.”
“With 73,000 tons of market-related downtime during the second quarter, the permanent closures are not surprising. We expect that Domtar will eventually announce a conversion into containerboard given the weakness in uncoated freesheet markets,” he wrote in a report.