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Domtar closes Sault hardwood mill, 130 jobs lost

Domtar Inc. announced today that its Sault sawmill will close on January 31. 130 employees of the hardwood operation will be laid off. Another 50 workers will be retained to dry and plane softwood lumber for other Domtar operations.
Domtar

Domtar Inc. announced today that its Sault sawmill will close on January 31.

130 employees of the hardwood operation will be laid off.

Another 50 workers will be retained to dry and plane softwood lumber for other Domtar operations.

The following is the full text of the company's announcement: ********************************************************************** Domtar Closes its Remanufacturing Facility in Daveluyville, Québec and its Hardwood Operation in Sault Ste. Marie, Ontario

MONTREAL, Nov. 29 - Domtar Inc. announced today that it has decided to close permanently its wood products remanufacturing facility in Daveluyville, Québec as well as its only hardwood lumber operation in Sault Ste. Marie, Ontario.

In all, 200 employees will be affected by these closures, when operations cease on January 31st, 2003.

A provision of $18 million has been established to cover costs related to these closures.

"Market conditions for lumber are very challenging, over supply in the North American marketplace combined with countervailing and anti-dumping duties has led us to review all our activities and to concentrate on operations that offer the best prospects given circumstances," said Raymond Royer, President and Chief Executive Officer of Domtar Inc.

"We have, therefore, decided to focus our efforts on improving the efficiency of our softwood lumber mills and to exit certain businesses.

Although management and employees have worked hard to make our Daveluyville edge-glued panel and Sault Ste. Marie hardwood businesses profitable, both operations could not be sustained over the long-term given their high costs and declining access to affordable fiber," added Mr. Royer.

The Daveluyville remanufacturing facility makes 4 million board feet of edge-glued panels per year and employs 70 people.

The facility was acquired in 1997, notably to dry softwood for other mills and to produce joists for the Japanese market.

After the collapse of this market, Daveluyville focused its activities on jackpine edge-glued panels for the Canadian market.

Unfortunately, as a result of high transportation costs and a declining access to jackpine, Domtar has decided to shift all its remanufacturing of jackpine at its Sullivan mill in the Abitibi region of Québec, which is closer to the fiber supply.

The Sault Ste. Marie sawmill manufactures 18 million board feet of hardwood lumber per year.

The mill employs 180 people and 130 employees will be affected by this closure.

Those remaining will continue to dry and plane softwood lumber for other Domtar operations.

Consistent with its corporate values, the Company will do its utmost to relocate to other Domtar facilities employees who so wish.

Employees who are losing their job permanently will be provided financial assistance and other services to facilitate their transition to other employment opportunities.

Domtar is the third largest producer of uncoated freesheet paper in North America.

It is also a leading manufacturer of business papers, printing and publishing papers, and specialty and technical papers.

Domtar manages according to internationally recognized standards 22 million acres of forestland in Canada and the United States, and produces lumber and other wood products.

Domtar has 12,500 employees across North America.

The Company also has a 50% investment interest in Norampac Inc., the largest Canadian producer of containerboard.


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David Helwig

About the Author: David Helwig

David Helwig's journalism career spans seven decades beginning in the 1960s. His work has been recognized with national and international awards.
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