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Winnipeg Free Press - PRINT EDITION
Domtar sticking with care homes, shuns tissue
MONTREAL -- Domtar Corp., North America's biggest producer of business and copying papers, is staying with its recent expansion into the personal-care sector and has no designs on the highly competitive tissue market, CEO John Williams said Friday.
He told analysts the personal-care business has sound long-term growth prospects in North America and Europe because of aging populations and that's where Domtar's focus will rest.
Williams recently paid US$264 million for Attends Europe, following the earlier acquisition of Attends North America -- which contributed $10 million in operating profit to Domtar's fourth quarter.
Domtar also produces fluff and softwood pulps and has been restructured to enter new growth markets as the Internet revolution reduces demand for its business papers by two to three per cent annually. The company operates 10 pulp and paper mills in North America (including Windsor near Sherbrooke, Que.) and total specialty papers capacity is 3.9 million tonnes.
It has just shifted the cost of maintaining the mothballed Lebel-sur-Quevillon softwood pulp mill to Vancouver's Fortress Paper Corp., which plans to convert it to "dissolving" or specialty pulp for the global rayon cloth market with a big loan from Quebec. Domtar will market its softwood pulp until the plant conversion is complete. Lebel and its sawmill employed 565 when closed in 2005.
"Fortress came to us with a sound business plan for reopening Lebel and this was best outcome for the region," Williams said. "But it just wasn't a project for us."
-- For Postmedia News
Republished from the Winnipeg Free Press print edition February 4, 2012 B5
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