Domtar reduces production capacity

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Paper and pulp manufacturer Domtar Corp. will permanently close its mill in Gatineau, Quebec; its converting center in Ottawa, Ontario; and its paper machines in Baileyville, ME, and Port Edwards, WI.

The driving forces behind these moves are "excess capacity and cost competitiveness," said Raymond Royer, president/CEO of Domtar, in a statement. He added that further "rationalization" might be implemented in the future as the company continues to adjust its production to demand.

In total, these closures will eliminate about 284,000 tons of Montreal-based Domtar's annual production capacity and reduce its total workforce by 430.

Last month, Domtar said it had entered into an agreement for the sale of its forest products business to Conifex Inc. for about CDN $285 million, including an estimated CDN $50 million of working capital.

In March, Domtar completed its merger with Weyerhauser Company's Fine Paper business.

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