Ashdown Paper Mill To Lay Off 110

Domtar Corp. announced that it will permanently shut down one of four paper machines at its Ashdown pulp and paper mill no later than July 1, 2011. The move will result in permanent layoffs of 110 workers.

"Domtar is committed to keeping a balance between its supply and its customer demand. Because secular demand decline in North America continues, we must permanently reduce our uncoated freesheet paper production capacity," said John D. Williams, Domtar CEO. "I want to thank affected employees for their efforts, and recognize all Domtar Ashdown mill employees for their hard work and continued focus on safety."

Following the shutdown, the Ashdown mill will continue to operate three fiber lines, a pulp dryer and three paper machines, and employ approximately 940 people. The Domtar mill will have an annual production capacity of approximately 810,000 metric tons of pulp and approximately 780,000 short tons of paper.

The closure will result in an aggregate pre-tax charge to earnings of approximately $80 million, which includes an estimated $77 million in non-cash charges relating to the accelerated depreciation of the carrying amounts of manufacturing equipment and the write-off of related spare parts and $3 million related to other costs.