JOHNSONBURG – It was a new day and a new company in Johnsonburg
as a “new Domtar” company took over the former Weyerhaeuser
papermill.
“It’s a brand new company,” said Tom Detwiler, mill manager.
A luncheon was held Thursday with Elk County dignitaries,
Johnsonburg community leaders as well as leaders at the new company
to celebrate a new era at the papermill, now called Domtar
Corp.
Detwiler said that an agreement was reached right before the New
York Stock Exchange opened Wednesday. The $3.3 billion deal was
announced in August 2006.
“Our future is very bright,” he said.
Detwiler explained the combined company’s annual sales in 2005
were $6.7 million – 77 percent of that came from pulp and paper.
Thirteen percent of the revenues came from paper merchants
operations and 9 percent came from wood products.
The new company will focus on the paper products, he said.
The major products is what Detwiler referred to as “uncoated
freesheet,” which is used for copy paper and premium imaging. This
represents 40 percent of the product line – 2.1 million tons
annually.
In the commercial printing and publication papers, uncoated
freesheet – offset, envelope and forms bond, is 32 percent of the
company’s capacity.
“We are a very, very major player,” he said.
The new Domtar is the largest uncoated freesheet producer in
North America at 34 percent of the market. In fact, it’s symbol in
the New York Stock Exchange is UFS for uncoated freesheet.
“We are number 1. We will begin at number 1, but it’s up to us
to remain number 1,” Detwiler quoted President and Chief Executive
Officer Raymond Royer.
They plan to do that with customer satisfaction.
The new company was formed by combining assets from Domtar and
Weyerhaeuser’s Fine Paper division.
“Both companies spun off assets for the new company,” Detwiler
said, adding that is harder to do.
Former Weyerhaeuser shareholders own 55 percent of the new
company; former Domtar shareholders own 45 percent.
The stock started its first day at $8.50 and ended at $8.85. On
Thursday, it was up 23 cents, closing at $9.10.
“I think Wall Street is smiling on this deal,” he said.
With its head office in Montreal, Quebec, the company has six
mills which are supported by 10 value-added and specialty paper
mills. The Johnsonburg plant is under the specialty mills and is
headed by Manufacturing Vice President Bart Nicholson.
The operations headquarters is in Fort Mill, S.C.
Detwiler also said the company is poised to have a stronger
presence in the North American market with 90 percent of its sales
in the U.S.
“Our leverage is our innovation heritage and our manufacturing
expertise by making use of our best practices,” Detwiler said.
Company-wide, Domtar has 1,400 employees – 400 of those are
located in Johnsonburg.
“We have many, many years of experience,” he said, as well as
“strong brand recognition.”
Detwiler also said the company will continue to focus on
environment, safety and the community.
According to Ron King of the Johnsonburg plant, the workers are
part of the Steelworkers union. The new company share information
and worked with the union to keep their contracts “status quo.”
“It was done to be a seamless transition,” he said.
At the time the deal was announced, Royer told the Associated
Press that he didn’t expect any job cuts or mill closures after the
deal was completed.
