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Domtar cost savings on track


September 25, 2007
By Pulp & Paper Canada

Montreal, QC — Domtar’s merger with the fine papers division of Weyerhaeuser is on track. According to the Montrea…

Montreal, QC — Domtar’s merger with the fine papers division of Weyerhaeuser is on track. According to the Montreal Gazette, Domtar should realize $80 million of its targeted $200 million in annual cost savings by year-end.

Optimization of the mill distribution network is one of the ways that Domtar expects to realize savings, reports Lynne Moore of the Gazette. At the Ashdown mill in Arkansas, for example, about 97% of the mill’s output is now shipped to the western U.S., while before the merger, this mill shipped smaller amounts to a larger area, and only 31% to the western U.S. When asked about closings, Domtar’s COO Marvin Cooper said that closings could hit the highest-cost facilities as the company adjusts to lower market demand.

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The company should reach $175 million annual savings by December 2008, and the $200 million level should be reached by March 2009. Domtar’s CFO Daniel Buron was speaking to analysts and investors in Kingsport, Tennessee, at an event to showcase the recently-rebuilt Kingsport mill. That mill is on track to produce 418,000 tonnes per year of uncoated free-sheet paper, with a workforce of only 330.


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