Domtar Corp. announces closure of pulp line at Plymouth, N.C mill

CHARLOTTE (Scrap Monster): Leading paper and paper products manufacturer-Domtar Corporation has announced plans to streamline the operations at its Plymouth mill in North Carolina. The move is aimed at consolidating its position in global fluff pulp market by improving its profitability.

According to company press release, one of the two production lines will be shut down permanently, as part of the restructuring process. Consequently, the company has decided to close the 90,000 tpy pulp line and idle all related assets. This is expected to result in workforce reduction of nearly 100 positions. The cut in position will optimize the employee count to ensure optimum utilization of resources. The restructuring process will be completed by middle of next year, the press release said. Upon completion of the process, Plymouth mill is expected to produce 380,000 tpy of fluff pulp.

Meantime, John D. Williams, Domtar President and Chief Executive Officer noted that the significant investments at the Plymouth mill in the past several years reiterate the company’s ongoing commitment to the mill. The restructuring activities will prepare the mill for long-term, sustainable success, Williams added.

Alongside, the Ashdown, Arkansas mill is expected to start production at the earliest. The restructuring at Plymouth mill coupled with streamlined production from Ashford mill will strengthen the company’s position in the fluff pulp market. Earlier in 2014, the company had decided to invest around $160 million in rebuilding an uncoated woodfree paper machine at Ashford mill into 516,000 tpy fluff pulp line. Domtar had commenced the work during Q2 this year and had announced that the conversion work would come to an end by third quarter this year.

During the month of August, Domtar had agreed to purchase the privately-held Home Delivery Incontinent Supplies Co.for a total cash consideration of $45 million with a possible earn-out payment of up to $10 million. The acquisition of the leading provider of adult incontinence and related products is expected to boost continued growth and success of its Personal Care division. This transaction is expected to close by end-2016, subject to customary conditions.

Earlier in June this year, Domtar Corporation had announced fresh investment of $36 million at is Windsor, Quebec mill towards construction of infrastructure for the installation of second generating unit. The investment is expected to improve the mill’s energy efficiency and reduce the production costs. The second generating unit is expected to become operational during the summer of 2017. The plant had commissioned the first generating unit at the mill in 2011.

In Q2 this year, the company had acquired the assets of Butterfly Health Inc. for an undisclosed amount, thereby expanding the product portfolio of the company’s Personal Care segment. The strategic acquisition is expected to further expand the company’s footprints in global markets, especially Europe.

About Domtar Corporation

Domtar Corporation is the largest integrated producer of uncoated freesheet paper in North America and the second largest in the world based on production capacity, and is also a manufacturer of papergrade pulp. Domtar is a leading provider of a wide variety of fiber-based products including communication, specialty and packaging papers and market pulp. The company is also a marketer and producer of a broad line of absorbent hygiene products.

With approximately 9,850 employees serving more than 50 countries around the world, Domtar is driven by a commitment to turn sustainable wood fiber into useful products that people rely on every day. Domtar’s annual sales are approximately $5.3 billion.