Domtar Corp. announced Friday (Aug. 7) it would permanently shutter its paper machine operations at its Ashdown plant to save $200 million by 2021. The South-Carolina based company will transition its Ashdown operations to soft wood and fluff pulp production.
This transition, which leaves part of the site operational, will cost up to $20 million and could take 14 months to complete. The company did not note the impact on the 142 employees who have been laid-off since April due to COVID-19 slowdowns.
“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 Ridgefields, 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 mill will produce additional market hardwood pulp until it converts the fiberline to softwood pulp. The conversion of the fiberline to 100% softwood is also necessary for an eventual expansion into containerboard, according to the company. Following the fiberline conversion, Ashdown will be a market pulp mill with annual production capacity of 775,000 tons of fluff and softwood pulp.
Domtar is a manufacturer of a wide variety of fiber-based products including communication, specialty and packaging papers, market pulp and absorbent hygiene products. It has approximately 10,000 workers worldwide.
“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,” the company said in a release.