Domtar paper rolls
Domtar Corp. is adjusting to shrinking paper demand by permanently shutting one of four uncoated freesheet paper machines at its Arkansas mill by July.
The move will trim the mill's annual paper production by 14 per cent or 125,000 tons and reduce its workforce by some 110 employees. The closure will result in an $80-million (U.S.) pre-tax charge to earnings, including $6-million in the first quarter.
About $77-million of the non-cash charges results from accelerated depreciation on manufacturing equipment and parts.
About 940 people will remain employed to operate three fibre lines, a pulp dryer and three paper machines. Domtar employs about 8,500 people across its system.
The mill's annual production capacity will be 810,000 tonnes of pulp and about 780,000 tons of paper.
Domtar CEO John Williams said the paper giant is committed to taking steps to maintain a balance between supply and customer demand.
"Because secular demand decline in North America continues, we must permanently reduce our uncoated freesheet paper production capacity," he said Tuesday.
Domtar is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America and the second largest in the world based on production capacity.
It also makes papergrade, fluff and specialty pulp.