Paper and pulp company Domtar, whose U.S. headquarters is in South Carolina, announced it will “indefinitely” idle its plant in Espanola, a town in Ontario, Canada. About 450 employees will be affected by the closure, which Domtar expects to last for a period “greater than one year.”
The plant will close “after years of ongoing operating losses and high costs associated with maintaining and operating the facility,” according to a news release. The facility’s pulp mill will shut in October, and the two paper machines will end operations by early November. The closure will result in a loss of 280,000 air-dried metric tons of northern bleached softwood kraft pulp and 69,000 tons of specialty paper. The plant produces more than 200 different grades of technical and specialty papers, according to Domtar’s website.
“The Espanola mill has been challenged for some time now,” said Steve Henry, who Domtar previously announced would take over as CEO, in the news release. “We have worked diligently to find a viable path forward for the operation including offering it for sale.”
A Domtar spokesperson told Packaging Dive via email that the facility had been on the market for sale — and it still is — but the company has not “received an offer that has resulted in a transaction.” It isn’t ruling out a future sale, according to the release. In February, Domtar agreed to sell its other nearby pulp mill, in Dryden, to First Quality; the deal was expected to close in the third quarter.
Domtar embarked on a $57.5 million modernization project to update the Espanola facility with new equipment in 2019. That same year, the Canadian government invested $28.8 million (Canadian) into the facility to support adding new equipment and processes. Innovation, Science and Economic Development Canada said in a news release at the time that the project would help to reduce emissions and waste while advancing innovations “that could replace single-use plastics when it comes to, for example, medical packaging and food wrap.”
However, the pandemic and “significant maintenance investments” required at the mill delayed the project, according to the spokesperson. “It became evident that the mill needed additional infrastructure investment before such a project could proceed and the project was put on hold.”
The Spanish River Pulp & Paper Company founded the mill in 1905, and it had a series of owners; Domtar acquired it in 1998.
Editor’s note: This story has been updated with information from Domtar about the proposed 2019 facility upgrade project and the ongoing nature of the facility’s listing for sale.