Andrea Klassen – Kamloops This Week
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 Thursday, 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 boiler were discovered during a maintenance outage at the end of October.
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.
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.
“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 shutdown 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” on 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.