Consumables
Domtar closes sale of text, cover and writing line of papers
Monday 28. April 2008 - Company impacted by cost inflation
Domtar Corporation announced today the closing of the transaction for the sale of its text, cover and writing product line of papers to SMART Papers of Hamilton, Ohio, an independent manufacturer and marketer of premium cast-coated, matte-coated and uncoated printing papers.
“This is the result of an effort to support our customers through the streamlining of our manufacturing system by selling brands isolated within Domtars paper product offering. With this transaction we will continue to reinforce our focus as the North American market leader in the areas of commercial printing, business and office, as well as converting and other specialty papers,” stated Raymond Royer, President and Chief Executive Officer of Domtar Corporation. “This focus will be important as we continue to grapple with tough market conditions,” indicated Mr. Royer.
Mr. Royer also said, “Recent escalating energy prices are translating into rapidly rising costs for raw materials. Besides the impact on direct energy consumption, we are also facing significant inflation pressures for fiber, chemicals and freight, which represent more than half of our pulp and paper manufacturing delivered costs.”
Domtar estimates that inflation pressures will increase these costs in the first quarter of 2008 by $35 to $45 million compared to the fourth quarter of 2007.