PORT HURON, Mich. (From news reports) -- Domtar Corp. has announced it will permanently close its Port Huron paper mill, which employs nearly 200 employees.
"It's obviously a difficult day," said Craig Timm, Domtar Corp. regional public affairs manager.
He said employees were notified Friday morning. The closure will happen over the next four to six months.
In a press release on Friday, the company reported its preliminary second quarter 2020 financial results and announced strategic initiatives.
The company reported a $4 million decrease in operating income between the first and second quarter of 2020 due to lower volume and unfavorable productivity, partially offset by lower maintenance costs and lower salaries, wages, and more, according to the release.
The company expects the overall environment to continue to be challenging and expects paper demand to remain weak, with some incremental recovery toward the year's end.
As part of the cost savings program, overall the company will permanently close the uncoated freesheet manufacturing at the Kingsport, Tennessee and Port Huron, Michigan mills, the remaining paper machine at the Ashdown, Arkansas mill and the converting center in Ridgefields, Tennessee. These actions will reduce the Company's annual uncoated freesheet paper capacity by approximately 721,000 short tons, and will result in a workforce reduction of approximately 780 employees. The Kingsport and Ashdown paper machines, which have been idled since April 2020, will not recommence operations. The Port Huron and Ridgefields mills are expected to shut down by the end of the first quarter of 2021.
"We have been proactive in reducing risk and safeguarding our ability to weather the current crisis," John Williams, Domtar Corp. president and CEO, said in a statement. "We are taking the appropriate steps to optimize our operations and to remain an agile, reliable partner to our customers. Despite the significant challenges we faced in pulp and paper markets, we have been able to manage costs while initiating cash and cost conservation initiatives across the network."