Tag Archives: Domtar

A fire yesterday at Domtar‘s Dryden, Ontario mill is under investigation.

The fire was reported between the 4th and 5th floors of the building, burning in the equipment.

“It was product burning, combustible materials inside of the equipment of the machinery on the fourth and fifth floors of the seven story building. It was contained to the equipment and extinguished by the mill fire crews,” Dryden fire chief Ken Kurz said.

The fire was extinguished within 45 minutes.

Read more:
Fire at Domtar (KenoraOnline)

Domtar is reporting net earnings of $45 million for the first quarter of 2013 on sales of $1,345 million.

These results can be compared to net earnings of $19 million for the fourth quarter of 2012 and net earnings of $28 million for the first quarter of 2012.

“The first quarter results in our paper business were disappointing and this is due to low productivity, resulting in high costs,” said John D. Williams, President and Chief Executive Officer. “While we benefited from better paper pricing than we expected, the reconfiguration of our Marlboro, South Carolina operations resulted in multiple paper grade transfers, upsetting productivity at several of our paper mills. We anticipate a return to a more normalized productivity in the quarters to come.” John D. Williams added, “Our personal care business remains on track and the capital investments should start to deliver the expected benefits towards the end of 2013.”

Operating income before items was $75 million in the first quarter of 2013 compared to an operating income before items of $84 million in the fourth quarter of 2012. Depreciation and amortization totaled $95 million in the first quarter of 2013.

The decrease in operating income before items in the first quarter of 2013 was the result of higher usage for energy and chemicals, higher unit costs for fiber, lower average selling prices for paper, higher general production costs and higher selling, general and administrative and other expenses. These factors were partially offset by higher volumes for paper, lower costs for planned maintenance, higher average selling prices for pulp and a favorable exchange rate.

When compared to the fourth quarter of 2012, paper shipments increased 2.9% and pulp shipments decreased 3.4%. Paper deliveries of Ariva^® increased 9.8% when compared to the fourth quarter of 2012. The shipments-to-production ratio for paper was 104% in the first quarter of 2013, compared to 97% in the fourth quarter of 2012. Lack-of-order downtime and machine slowdowns in papers totaled 8,000 short tons in the first quarter of 2013. Paper inventories decreased by 34,000 tons while pulp inventories increased by 16,000 metric tons at the end of March, compared to December levels.

Read full release from Domtar

It will be at least another 1.5 years before the Prince Albert pulp mill in Saskatchewan will be operating again.

The mill was closed by Weyerhaeuser in 2006.  Domtar acquired  the mill in 2007 in its merger with Weyerhaeuser’s fine paper assets.

Paper Excellence purchased the mill in 2011 from Domtar and plans to convert the mill to a dissolving pulp operation by the fall of 2013.

The reopening will be delayed for a few reasons:

• Paper Excellence is in negotiations to alter their sale agreement to produce paper pulp.  Originally the company purchased the mill to produce dissolving pulp only, but the market prices have dropped significantly resulting in Paper Excellence’s desire to produce market grade pulp. Their original sales contract included a non-competing agreement.
• waiting for a new technology being developed in Saskatoon for producing both traditional pulp and dissolving pulp that will reduce their capital costs by $85-$90 million
• maintenance issues, mechanical problems, and instrumentation problems due to the 6 year shut down. $75 million extra will be spent to restore the equipment

Dale Paterson, vice president of operations for Paper Excellence, said, “I have to give credit to the people who shut the place down, because they did an incredible job to ensure the equipment was well-preserved.”

113 people are currently working at the mill.  24 of the employees are producing power for SaskPower.  Paper Excellence plans to employ 250 when the mill reopens.

690 people lost their jobs at the mill in 2006 when it was closed by Weyerhaeuser.

Read more:
Roadblocks thrown in the pulp mill’s way (Prince Albert Daily Herald)
Prince Albert, Sask. paper mill opening delayed (CBC)
Paper Excellence’s Prince Albert Pulp Inc. (Paper Excellence)

Domtar‘s A-line pulp machine will be shutting down by the end of the work day today.

30 jobs have already been cut. The final number of jobs lost will be 125 once the phase-out concludes this spring.

The unionized workers rejected the company’s transition and layoff plan in a vote on January 31. Although both sides continue to meet regularly, a transition plan has not been agreed upon.

It does appear likely that employees with more seniority will be able to bump junior employees from the mill’s B-line.

Domtar announced this closure in December.  The shutdown of the A-line will result in a permanent curtailment of Domtar’s annual pulp production by approximately 120,000 air-dried metric tons of sawdust softwood pulp.

The Kamloops pulp operation will continue to operate its remaining pulp manufacturing B-line with an annual capacity of approximately 350,000 air-dried metric tons of softwood kraft pulp and employ approximately 300 people.

Read more:
Domtar’s A-line closes Monday (Kamloops – The Daily News)

Domtar Corporation has signed, through its operating subsidiaries, an agreement to acquire Xerox’s paper and print media products business in the United States and Canada.

“The Xerox brand is well regarded in the paper markets it serves,” said John D. Williams, Domtar’s President and Chief Executive Officer. “This deal brings together Xerox’s branded papers with Domtar’s already comprehensive paper offering and will allow us to better serve our customers.”

While Xerox does not manufacture paper, the company has long distributed through its brand name a broad range of coated and uncoated papers and specialty print media including business forms as well as carbonless and wide-format paper. This business will now become part of Domtar’s pulp and paper segment, and Domtar will market and distribute Xerox-branded paper and print media.

“As Xerox broadens its business to focus more on services and innovative document technology, we saw an opportunity for our paper business clients to be better served by a leader in the industry,” said Frank Edmonds, senior vice president, Xerox Global Paper and Supplies Distribution Group. “It’s an across-the-board win. Xerox benefits through a trademark licensing agreement with Domtar; Domtar adds a well-regarded brand to its portfolio; and our respective clients get a simplified, ‘one-stop’ experience through Domtar’s extensive offerings and distribution network.”

Xerox will continue to manufacture, sell and support its broad range of consumables, such as toner and ink, and Xerox Replacement Cartridges.

The transaction is expected to close in the second quarter of 2013, subject to customary closing conditions.

Source: Domtar

Dryden, Ontario is trying to find a way to cope with the reassessment of the Domtar mill that has reduced the mill’s tax assessment from $36 million to $14 million.

This has meant a $1 million decline in Dryden’s large industrial taxation revenue this year and retroactive tax rebates of $5.4 million from 2009 to 2012.

Dryden is considering the following moves to cope with the reduction:

• A residential tax increase, possibly up to 2.5%
• 10% increase in user fees
• across the board reductions of 4% in all areas of public works
• reducing the scope of the Dryden Development Corporation to being a reactive body rather than actively seeking out investment to Dryden
• closing Aaron Provincial Park for the summer
• funding the Dryden Youth Centre until June while it seeks out alternative funding sources
• reducing landfill site accessibility to 5 days per week
• cutting hours and staff at the Dryden Museum
• reducing city facilities running 7 days a week to 6, and those running 6 days to 5
• reducing grants to the Dryden Public Library by $36,000
• cutting city employees’ work hours from 8 to 7 per day

Possibility of tax assessment appeal

On March 7, MPAC (the Municipal Assessment Review Corporation) decided there is insufficient evidence to appeal the ARB’s (Assessment Review Board) reassessment of the Domtar mill.

If Dryden wants to appeal the decision, they will have to do it without MPAC’s support.

The ARB based its assessment of Dryden’s Domtar  mill on what the company argued was a similar mill in Marlboro, South Carolina.

Espanola and Fort Frances, Ontario are both facing similar situations after the mills in their towns were also reassessed.

Read more from The Dryden Observer:
‘This is about saving Dryden’ - Council trying to whittle down potential tax increase in latest budget draft
City, MPAC split over ARB appeal

Domtar Corporation has successfully installed a commercial-scale lignin separation plant at its Plymouth, North Carolina mill, the first U.S. facility of its type in over 25 years.

The production of BioChoice™ lignin began in February, with a targeted rate of 75 tons a day, destined for a wide range of industrial applications as a bio-based alternative to the use of petroleum and other fossil fuels.

The successful installation of commercial-scale lignin removal capacity at the Plymouth Mill is the culmination of a research and engineering project launched by Domtar in 2010. This project was further boosted when the U.S. Department of Agriculture and the U.S. Department of Energy awarded the company a grant through the Biomass Research and Development Initiative. Domtar’s lignin operation sets a new path for the industry and also marks the latest sustainability milestone for a company that has long been recognized as an industry leader in forest certification and environmental stewardship.

“Our vision is to be a global leader in fiber-based innovation,” said Bruno Marcoccia, Domtar’s director of research and development. “A big part of this is our focus on partnering with best-in class collaborators to develop new products and markets for a wide portfolio of initiatives, like BioChoice.”

“The possibilities for making a real difference in terms of offering manufacturers a bio-based alternative to the use of petro-chemicals is truly exciting,” said Hasan Jameel, a professor in North Carolina State University’s Department of Forest Biomaterials. “This is a big win for sustainability on two counts – Domtar improves the efficiency of its pulp-making process, and at the same time the market gets a reliable, high-quality source of this underused material with so much potential.”

A wide range of potential applications for BioChoice lignin exists, including fuels, resins and thermoplastics.

Source: Domtar

Jim Blight, General Manager of the Domtar mill in Dryden, Ontario, has been named Mill Manager of the Year at the annual PaperWeek Canada industry conference in Montreal.

The award is given out by the Pulp and Paper Technical Association of Canada, or PAPTAC, to recognize outstanding leadership and performance results in the Canadian pulp and paper industry.

Jim has worked at the Dryden Mill since 1998, and has been in the General Manager role since 2007.

“Taking quantum leaps in production capacity, cost structure, quality and safety performance is always the result of the hard work of many, but it takes a leader to bring out the best in people that allows these positive, sustainable results to happen,” noted Martin Lorrion, Domtar’s Vice-President of Manufacturing. “We’re rightfully proud of him and what he’s been able to accomplish with a strong team in Dryden.”

“I need to share this professional honour with my colleagues here at the mill,” added Jim Blight. “We’ve had to make some difficult but necessary changes over the recent years to reposition ourselves for the changing global markets – we’re now a safer, more competitive operation thanks to many people making a sustained, collective effort over a long period of time.”

The assessed value of the Domtar mill in Espanola, Ontario has been drastically lowered.

The updated assessment for the years 2009 through to 2012 is $9.9 million

The original assessed value for these years ranged between $19 million, through to $26.5 million. The $19 million was the assessed value arising from the previous decision for the years 2006, 2007 and 2008.

As a result of the reassessment, the Town of Espanola will need to refund $4.9 million in property taxes to Domtar. The Town had prepared for a reduction, but not such a drastic drop in assessed value.

“This news is devastating; the municipality relies on MPAC’s valuations, and for the decision to be almost onethird of this figure is unacceptable. We cannot expect our taxpayers to be held responsible for this financial burden which is unduly handed to them. This situation identifies critical errors in the methodology used for calculating these values and in funding formulas which do not provide for reconciliations of prior years when such adjustments are made retroactively. Residents simply cannot afford a 50% tax increase for 2013, which is what would be required to fund this liability.”

~ Ms. Townsend, ClerkTreasurer/Administrator for Espanola

The municipality plans to work together with other Ontario mill towns, Dryden, Thunder Bay, and Fort Frances, who are facing the same situation.

Source: Town of Espanola

The Municipal Property Assessment Corporation (MPAC) has reassessed the value of Domtar‘s mill in Dryden, Ontario.

Previously, the mill property was assessed at approximately $50 million.  Domtar appealed the assessment for the years 2009 to 2012 and were hoping for a reassessed value around $36 million.

MPAC reassessed the mill at $14 million – a drastic 72% drop in assessed value.

This will mean a $1 million decline in Dryden’s large industrial taxation revenue this year and retroactive tax rebates of $5.4 million from 2009 to 2012.

The City of Dryden has said this reassessment will have a major impact on the City’s budget for 2013.

Read more:
Huge Domtar reassessment sends city back to drawing board on budget (The Dryden Observer)
M-PAC Assessment Bad News For Dryden (CKDR Dryden)