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Domtar to shed 125 jobs — 29% of its workforce
Domtar will lay off nearly one-third of its employees by March of next year as it shuts down one of two pulp machines at its Kamloops mill.
The company announced today (Dec. 13) that it will shuttering its "A-line" machine, which produces 120,000 metric tons of sawdust pulp per year.
Of the company's 426 workers, 125 will be effected by the shutdown. Of that number, 107 are unionized.
Domtar spokeswoman Bonny Skene said the A-line is the smaller of the mill's two pulp operations, noting sawdust pulp is less competitive than the softwood pulp produced on the B-line.
"It's relatively small so, in a global pulp market, it's not what we would call a scale operation," she said.
"And, it competes in a market of hardwood pulp, which is produced by many producers in the Southern Hemisphere that have much different cost structures."
The mill was also facing repair costs on the A-line, Skene said, after issues with the machine's recovery boiler were discovered during a maintenance outage at the end of October.
Murray Matheson, president of Communications, Energy and Paperworkers Union of Canada Local 10-B said Domtar has raised concerns about the viability of the A-line in the past, noting the union had been aware the boiler was nearing the end of its lifespan for several years.
"So, I guess that day came and the company looked at options and chose this one, which is probably the worst possible option," he said.
Skene declined to say what repairs would have cost the company.
In 2010, Domtar retrofitted a recovery boiler on its B-line with the help of a federal government grant of $57 million, about half of which went to boiler repairs.
The B-line, which produces long-fibre pulp using wood chips rather than sawdust, will continue operations.
Skene said the product produced on that machine is more competitive in the global pulp market. Domtar produces about 350,000 metric tons of softwood pulp each year.
Matheson said it's not yet clear who the A-line closure will effect, since workers typically work both lines — sometimes within the same shift.
"We, the executive, haven't been told the breakdown of this yet," he said, "so we're unsure of everyone who's effected. But, obviously, the junior people will be the most effected."
Matheson said emotions are running high at the mill following the announcement, which workers received at about the same time as the general public.
"People are devastated," Matheson said.
Skene said the company plans co-ordinate with Human Resources Development Canada and other agencies to provide services for those workers facing the axe. Domtar also plans to meet with the union to work on an adjustment plan.
Matheson said the union expects to meet with Domtar next week, to determine if any of the 125 jobs can be saved and discuss training initiatives for those whose positions will be eliminated.
"Prevailing economic conditions in the global pulp markets and the deteriorated competitiveness of this small pulp manufacturing line, coupled with unforeseen boiler repair costs, have forced us to rationalize this pulp production capacity," said Mike Edwards, Domtar's senior vice-president of pulp and paper manufacturing.
"We will focus our energy and resources on optimizing the larger, more competitive, 'B' pulp manufacturing line which will continue to operate."
Mayor Peter Milobar said the shut down announcement came as a surprise and a disappointment.
"I guess the bright side is it's not the full mill, but certainly 125 jobs is going to be sorely missed," he said.
In addition to direct jobs, Milobar said the closure would likely have a "ripple effect" to other area businesses, including companies transporting product to and from the pulp mill and sawmills that will now need to find a new place to take their sawdust.
Anita Grover, interim executive director of Venture Kamloops, said the community will feel the impact of the job losses, in part because Domtar workers have been such generous supporters of local charitable causes.
"It is a significant size and, unfortunately, it will have an impact on Kamloops," she said.
But, Grover added, there is a possibility those laid off may be able to find work at manufacturing mining-support companies in the area.
"What we're seeing is very well-paid jobs, very skilled workers," she said. "We really hope that a lot of those job losses will be absorbed because we do know that there are companies that are looking to expand."