Domtar to Close Columbus Mill, Sell Coated Groundwood Business to NewPage

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Domtar, Montreal, Que., Canada, said this week that it will permanently close its coated groundwood paper mill in Columbus, Miss., USA. The Columbus mill has an annual production capacity of 238,000 tons of coated groundwood and 70,000 metric tons of thermomechanical pulp. It currently has 219 employees. Operations are expected to cease by the end of April.

"Market conditions for coated groundwood paper are challenging and despite the best efforts of our employees—and these efforts have been commendable—the mill continues to suffer from a weak cost position," said John D. Williams, president and CEO of Domtar. "With this permanent closure, Domtar is exiting the coated groundwood paper business."

Domtar also announced the sale of its Choctaw, Saturn, and Jupiter coated groundwood product lines and trademarks to NewPage Corp. of Miamisburg, Ohio. The sale to NewPage also includes the mill's paper inventory and book of business. Domtar intends to dismantle and dispose of remaining assets as deemed appropriate.

 "With Domtar's decision to permanently close its Columbus mill and exit the coated groundwood product sector, we will be working closely with them to ensure that the immediate needs of their customers are met without any disruption of service," Tom Curley, NewPage president and CEO, said. "We look forward to the opportunity to transition these customers to NewPage product and service offerings that meet their future business needs. We recognize that customers have a choice in paper suppliers, and we want to earn their business by ensuring they have a seamless transition to NewPage, should they desire to do so."

NewPage is the largest coated paper manufacturer in North America, based on production capacity, with $3.1 billion in net sales for 2009. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint, and specialty papers. In the U.S., the company owns mills in Kentucky, Maine, Maryland, Michigan, Minnesota, and Wisconsin, and in Nova Scotia, Canada, with a total annual production capacity of approximately 4.4 million tons of paper, including 3.2 million tons of coated paper, 1.0 million tons of uncoated paper, and 200,000 tons of specialty paper.