Domtar Reduces Uncoated Freesheet Paper Production to Address COVID-19 Business Conditions

Domtar Corporation recently provided an update to its previously announced capacity reduction plan, which is designed to temporarily right-size production capacity in light of the business conditions created by the COVID-19 pandemic.

Domtar plans to temporarily idle the operations of its Hawesville, Ky., mill beginning May 5, 2020. The company expects to restart the H1 paper machine in June 2020, while the H2 paper machine will remain idled until July 2020. The temporary shutdown will reduce Domtar’s uncoated freesheet paper production capacity by approximately 83,000 short tons. As a result of the shutdown, the company will temporarily lay off approximately 400 employees at the Hawesville mill.

This incremental action follows Domtar’s idling of its Kingsport, Tenn., mill and the A62 paper machine at its Ashdown, Ark., mill. Combined, the temporary shutdowns will reduce production capacity by approximately 227,000 short tons of uncoated freesheet paper. The company anticipates inventory to be at appropriate levels after this downtime.

“Throughout the COVID-19 pandemic, we have been actively monitoring the impacts to our business and taking methodical steps to optimize capacity in the current environment,” said John D. Williams, president and CEO. “We believe it is appropriate to take the additional step of temporarily idling our Hawesville mill in light of reduced paper demand. We are optimistic that we have taken the right actions to effectively manage the business through these evolving market conditions.”

“We regret that this temporary action will have an impact on our exceptional people and their families,” said Mike Garcia, president, Pulp and Paper division. “We are doing everything we can to help them through this unprecedented period, and we have great confidence in the long-term strength and viability of our paper mills.”

Beyond these temporary shutdowns, all of Domtar’s other facilities remain fully operational and shipments continue to proceed without disruption. The health and safety of Domtar’s employees remains its central focus as the Company works to operate its business as efficiently as possible to meet the needs of its customers.

For more information, visit www.domtar.com/en.