Domtar, a leading producer of uncoated freesheet paper, has made the decision to indefinitely idle paper operations at its Ashdown mill located in Arkansas.
Shift in Production Demand
After restarting the A62 paper machine in 2021 to meet the increased demand from the North American customer base for uncoated freesheet paper, Domtar has now determined that the demand for these products has reached a level where the current production capacity is no longer necessary.
Impact on Workforce and Capacity
Despite the curtailment of paper operations, there are no expected reductions in the workforce. The Ashdown mill’s A62 paper machine and associated sheeter will be idled by the end of June, resulting in a reduction of Domtar’s annual uncoated freesheet capacity by 216,000 short tons.
Ratings Downgrade and Industry Trends
S&P Global Ratings recently downgraded Domtar to B+ from ‘BB-, citing the secular decline in demand for uncoated freesheet paper. This category includes paper used in printers, copy machines, and envelopes.
Pulp Dryer Restart
In conjunction with the curtailment of paper operations, the Ashdown mill will restart its pulp dryer, adding 165,000 air dried metric tons annually of capacity for southern bleached softwood kraft pulp. This increased capacity brings the mill’s total annual capacity to 700,000 air dried metric tons, with 442,000 air dried metric tons dedicated to fluff pulp production.
Acquisition and Future Outlook
In 2021, Paper Excellence Group based in British Columbia acquired Domtar in a deal totaling approximately $3 billion.
For more information, please contact Josh Beckerman.