On Friday, August 7, Domtar Corp. announced the permanent closure of its paper machine operations at its Ashdown mill to save $ 200 million by 2021.
Headquartered in South Carolina, the company will transition its operations from Ashdown to production of soft wood and fluff pulp. The transition will cost up to $ 20 million and may take up to 14 months to complete.
“As part of the cost savings program, the company will permanently close the uncoated freesheet manufacturing at the Kingsport, Tennessee and Port Huron, Michigan mills, the remaining paper machine at the Ashdown, the converting center in Ridgefield, Tennessee. These actions will reduce the company’s annual uncoated freesheet paper capacity by approximately 721,000 short tons, and will result in a workforce reduction of approximately 780 employees ”, the company stated in a release.
When completed, the Ashdown plant will produce hardwood pulp from the additional market until it converts the fiber line into long fiber pulp. According to the company, the conversion of the fiber line into 100% long fiber is also necessary for an eventual expansion to containerboard. After the conversion of the fiber line, Ashdown will be a market pulp mill with an annual production capacity of 775,000 tons of fluff pulp and long fiber.
With approximately 10,000 employees around the world, Domtar has an extensive portfolio of fiber-based products including communication, specialty and packaging papers, market pulp and absorbent hygiene products.
“The goal of the program is to build a stronger business operation, enhance the company’s cost efficiency, and improve operating margins and maximize productivity and cash flow. The cost saving initiatives include capacity reduction and asset closures, mill-level cost savings and rightsizing support functions. The leaner organizational structure is also expected to improve communication flow and cross-functional collaboration, leveraging more efficient business processes”, Domtar said in a release.