| Domtar Provides Update on Capacity Reduction Plan to Address Ongoing COVID-19 Business Conditions |
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FORT MILL, S.C. (News release) -- Domtar Corporation 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, Kentucky, mill beginning May 5th 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, Domtar will temporarily lay off approximately 400 employees at the Hawesville mill.
This incremental action follows Domtar's idling of its Kingsport, Tennessee, mill and the A62 paper machine at its Ashdown, Arkansas 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. 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," said John D. Williams, President and Chief Executive Officer.
"We regret that this temporary action will have an impact on our exceptional people and their families. 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," said Mike Garcia, President Pulp and Paper division.
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 details on how Domtar is responding to the COVID-19 pandemic, please visit the Business Continuity section of Domtar's website.
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