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Domtar Announces Measures to Mitigate Weak U.S. Dollar
Ticker Symbol : DTC (TSX, NYSE)
MONTREAL, Dec. 9 /PRNewswire-FirstCall/ -- Domtar Inc. announced today that it
will close indefinitely part of its operations at its Cornwall mill. More
specifically, the company will shut down the pulp mill, a paper machine, and a
sheeter at this location. The closure will take effect on March 8, 2005 and
will last until such time as economic and market conditions allow these assets
to operate profitably. In so doing, Domtar will be curtailing production by
150,000 tons of pulp and 85,000 tons of paper. This measure will impact
approximately 390 jobs. Domtar also announced that it will eliminate a further
400 jobs across the company's operations in Canada and the United States,
including management and staff functions, by the end of 2005.
"Our Cornwall mill is significantly exposed to the difficult market conditions
facing the Canadian pulp and paper industry. By using lower cost pulp
manufactured at other company facilities as well as closing down one paper
machine in Cornwall and redirecting products to more cost effective paper
machines in our system, Domtar will improve its overall performance while at
the same time continue to serve customers," stated Raymond Royer, President and
Chief Executive Officer of Domtar Inc.
"Domtar must take the necessary steps to face world-wide competition. The
Cornwall decision as well as the reduction of a further 400 positions will
contribute to our previously announced objective of improving our profitability
by $200 million. This workforce reduction will mainly result from the sharing
of best practices between manufacturing facilities and staff functions, the
completed deployment of a single Enterprise Resource Planning information
technology system as well as a concerted effort by all to reduce spending,"
noted Domtar's President and CEO. "I am saddened, however, that Domtar
employees will lose their jobs. I can assure them that we will do our utmost to
support them during the transition," concluded Mr. Royer.
In keeping with its corporate values, Domtar will help employees affected by
today's announcement. In fact, when possible, affected personnel will be re-
deployed. Workforce reductions will also be achieved through attrition.
Finally, employees that lose their jobs will receive financial assistance and
be given access to outplacement services.
Forward-looking statements
This press release contains statements that are forward-looking in nature.
Statements preceded by the words "believe," "expect," "anticipate," "aim,"
"target," "plan," "intend," "continue", "estimate," "may," "will," "should,"
and similar expressions are forward-looking statements. Forward- looking
statements are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by management, are inherently subject to
known and unknown risks and uncertainties such as, but not limited to, general
economic and business conditions, product selling prices, raw material and
operating costs, changes in foreign currency exchange rates, our ability to
integrate acquired businesses into our existing operations, and other factors
referenced herein and in Domtar's continuous disclosure filings. Therefore,
Domtar's actual results may be materially different from those expressed or
implied by such forward-looking statements.
DOMTAR IS THE THIRD LARGEST PRODUCER OF UNCOATED FREESHEET PAPER IN NORTH
AMERICA. IT IS ALSO A LEADING MANUFACTURER OF BUSINESS PAPERS, COMMERCIAL
PRINTING AND PUBLICATION PAPERS, AND TECHNICAL AND SPECIALTY 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 11,000 EMPLOYEES
ACROSS NORTH AMERICA. THE COMPANY ALSO HAS A 50% INVESTMENT INTEREST IN
NORAMPAC INC., THE LARGEST CANADIAN PRODUCER OF CONTAINERBOARD.
DATASOURCE: DOMTAR INC.
CONTACT: William George, Vice-President, Communications
and Government Relations, (514) 848-6808, ;
Source: Raymond Royer, President and Chief Executive Officer,
;
To request a free copy of this organization's annual report, please go to
http://www.newswire.ca/ and click on reports@cnw.