UPDATE: Domtar Kingsport mill to be repurposed
Officials with Domtar have announced they will close down and repurpose the idled Kingsport mill.
A quarterly report from the company on Friday said the uncoated freesheet manufacturing in Kingsport in addition to another mill in Michigan, as well as a company paper machine in Arkansas and a converting center in Ridgefields, TN will close as part of their cost reduction program.
“We remain disciplined in our efforts to manage our costs to improve profitability and further strengthen our balance sheet. In line with these goals and current market conditions, we are implementing a significant cost-savings program to streamline operations, maximize productivity and improve margins. This program will create a stronger, leaner organization aligned to meet the needs of the business and our customers in a post COVID-19 era,” said Williams. “This important and necessary step is expected to reduce our annualized costs by more than $200 million, while significantly improving our free cash flow and return on invested capital. We have a talented and dedicated workforce at Domtar, and decisions that affect people are never easy. However, we are taking the necessary steps to better position our business for the future.”
Domtar says it plans to repurpose the assets of the Kingsport mill by entering into the linerboard market with the mill’s conversion into a recycled linerboard mill, expected to employ around 160 employees. The conversion is expected to be complete by the first quarter of 2023.
“Repurposing the Kingsport mill provides Domtar with the best strategic entry point into a growing market with a very competitive, low-cost asset and represents a first step to building a large and cost-competitive business,” said Williams. “Kingsport is well-positioned to be the go-to supplier to independent converters for quality, service and innovation as the mill is less than a day’s drive from over 60 customers representing an addressable 3.9 million tons of annual containerboard demand.”
You can read the full report here.
*NOTE: A previous version of this story we published has been corrected. We apologize.
Photo Courtesy: Domtar
