Domtar closes three paper machines

Domtar Inc. announced Wednesday it's closing three paper machines -- two in Ontario and one in Wisconsin -- in a move that will put up to 335 people out of work.

The announcement prompted a swift reaction from the Communications, Energy and Paperworkers (CEP) Union of Canada, which promised to work to save the two Ontario machines in St. Catharines.

Cec Makowski, the union's Ontario vice-president, said that CEP played a critical role in saving paper mills in Sault Ste. Marie, Kapuskasing and Thunder Bay.

"We will not hesitate to draw on those victories to try to save Domtar in St. Catharines," Makowski said.

Montreal-based Domtar said that closing the three machines will reduce its paper manufacturing capacity by 80,000 tons.

End of September

The two St. Catharines machines will close permanently at the end of September. No date was announced for closing the third machine in Nekoosa, Wisconsin.

Domtar said it will try to relocate affected employees at other company operations. It has 210 employees in St. Catharines and 125 at the Wisconsin machine.

The company has allocated $45 million for severance costs and other closure-related expenses. Alternatives to closure

"In spite of efforts on the part of employees to improve efficiency, the hard reality is that Domtar is faced with low demand for products manufactured on three high-cost and not very flexible paper machines," Domtar president and chief executive Raymond Royer told the Associated Press.

Makowski said he has asked St. Catharines Mayor Tim Rigby and three economic development officers for an immediate meeting.

"The union is deeply concerned by this announcement," Makowski said, "but we are encouraged by the company's stated commitment to seek alternatives to the closure. Domtar has also agreed to sit down and negotiate terms beyond what is in the collective agreement to mitigate damages."

"We intend to bring experienced professionals and access to venture capital to the table," Makowski said.

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