By Josh Beckerman
Domtar, one of the top producers of uncoated freesheet paper, will indefinitely idle paper operations at its Ashdown mill in Arkansas.
The company said it "restarted the previously idled A62 paper machine in 2021 at a time when our North American customer base needed additional supply of uncoated freesheet paper," but now "demand for these products has reached a level that no longer requires this production capacity."
The curtailment isn't expected to result in a workforce reduction.
S&P Global Ratings downgraded Domtar to B+ from 'BB- on Thursday and said demand for uncoated freesheet paper is in secular decline. This category includes printer and copy machine paper and paper used to produce envelopes.
The Ashdown mill's A62 paper machine and associated sheeter will be indefinitely idled by the end of June, reducing Domtar's annual uncoated freesheet capacity by 216,000 short tons.
Related to the curtailment, the Ashdown mill will restart its pulp dryer, resulting in 165,000 air dried metric tons annually of added capacity of southern bleached softwood kraft pulp. This new capacity increases the mill's total to 700,000 air dried metric tons annually, inclusive of 442,000 air dried metric tons of fluff pulp.
British Columbia-based Paper Excellence Group bought Domtar in 2021 for about $3 billion.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
February 23, 2024 15:35 ET (20:35 GMT)
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