Update: Domtar to Restart Ashdown Paper Machine to Meet Demand


Update: Domtar to Restart Ashdown Paper Machine to Meet Demand
Opened in 1968 and acquired by Domtar in 2001, the Ashdown mill has a paper production capacity of 200,000 short tons a year. (Domtar)

Domtar Corp. of Fort Mill, South Carolina, said Thursday that it will restart its paper machine at Ashdown "to meet increasing customer demand" for copy and printer paper as workers return to the office as the pandemic ebbs.

The move could put scores of people back to work in Little River County after 109 employees lost their jobs when Domtar shuttered that machine as part of a companywide plan to cut costs by $200 million by the end of 2021.

"We're very excited, to say the least," County Judge Mike Cranford told Arkansas Business on Thursday. "Whenever they idled that machine, it was not known if or when it would ever come back. So we were certainly praying for good news, and we got it this morning."

The publicly traded company (NYSE: UFS) announced plans in August 2020 to shut down the machine, as well as certain operations in Kingsport, Tennessee; Port Huron, Michigan; and Ridgefields, Tennessee. The Ashdown and Kingsport operations had been idled since April 2020 due to "the unforeseeable business conditions driven by the COVID-19 pandemic."

As a result, the company reduced its annual uncoated freesheet paper capacity by about 721,000 short tons. Restarting the Ashdown machine in January will return 185,000 tons of capacity to Domtar's network, the company said.

"As the economy begins to recover from the pandemic, the demand for paper is also recovering," Rob Melton, Domtar's senior vice president, pulp and paper commercial, said in a news release. "Our customers' business is steadily growing, and we want to support that growth by leveraging the flexibility of our asset base."

Domtar's Ashdown plant also produces softwood and fluff pulp. Those operations employ about 550 people. In all, Domtar employs about 6,400 people in 50 countries. In May, Paper Excellence of Richmond, British Columbia, said it would buy the company in a $3 billion cash deal. 

It was unclear Thursday how many workers would return to the plant. Company spokeswoman Tammy Waters told Arkansas Business that Domtar is evaluating staffing. 

"We'll work with our local union leadership on that," she said. "And that process is starting as early as today."

Waters said retirements had accounted for some of the job cuts. Cranford said he'd heard that some workers who chose to retire were offered "comfortable" severance packages.

Cranford said Domtar pays about $5 million a year in property taxes and provides jobs with better-than-average pay. He said its operations affect a four-state region. Restarting the machine will put more loggers back to work and put timber merchants in a better position to sell it at a higher price, he said.

"So it's a tremendous economic advantage for the whole region," Cranford said.

Vickie Williamson, Little River County's economic development director, said the county is "thrilled" that Domtar will restart the machine and that the paper market is bouncing back. 

"We hope and think that is a good promise for a brighter future, actually," she said.


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