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Domtar to Spend $160M to Convert Paper Machine in Ashdown; 140 Jobs Lost

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Domtar Corp. of Montreal said Wednesday that its board of directors approved a $160 million capital project to convert a paper machine at its Ashdown mill to a high quality fluff pulp line used in absorbent applications such as baby diapers, feminine hygiene and adult incontinence products.

The conversion is expected to come online by the third quarter of 2016 and result in the loss of about 140 jobs, company officials said. Currently, the Ashdown plant employs more than 1,000 workers.

The project will allow for production of up to 516,000 metric tons of fluff pulp per year. Domtar said the move will also result in the permanent reduction of 364,000 short tons of annual uncoated freesheet production capacity in the second quarter of 2016.

“The fluff pulp conversion project at the Ashdown mill is an important step in advancing our strategy to generate $300 [million] to $500 million of EBITDA from growth businesses,” CEO John D. Williams said in a news release. 

“We are expanding our presence in a growing business that will allow us to support our top‐tier supplier position with some of the world’s largest producers of absorbent hygiene products,” Williams said. “Once completed, Ashdown, together with our Plymouth [North Carolina] mill, will provide a platform to further strengthen our leading position as an effective producer of high quality fluff pulp with nearly one million tonnes of total production capacity.”

The conversion is expected to begin during the second quarter of 2016; the fluff pulp line is scheduled to start by the third quarter 2016.

About $40 million of the cost of conversion is expected to be invested in 2015; the company will invest $120 million in 2016. Domtar also said will also invest in a pulp bale line that will provide flexibility to make papergrade softwood pulp, contingent on market conditions.

The Ashdown mill opened in 1968. It became part of Domtar in 2001. Its products include uncoated freesheet papers: Offset, copy paper, laser form bond and check paper; and bleached hardwood and softwood kraft market pulp. It has operated three pulp lines and three paper machines.

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