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Domtar to shut down paper operations in Dryden

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Domtar Corporation announced Tuesday that it will permanently shut down the paper machine and converting operations of its Dryden mill.

This will result in the permanent curtailment of Domtar’s annual paper production capacity by approximately 151,000 short tons of uncoated freesheet paper and will affect approximately 195 employees.

Dryden papermaking and converting operations are expected to cease by mid-November 2008.

“Given adverse economic conditions and the continued softening of demand for fine papers, we need to further reduce our production capacity,” said Raymond Royer, president and CEO of Domtar in a press release.

“The mill’s relative cost position and the need to maintain a balance in Domtar’s supply and demand system have made this difficult decision necessary,” he added.

“This announcement also reflects our strong commitment to our customers and other stakeholders to be the most efficient producer in North America. Dryden papermaking employees have made commendable efforts over the last several years in trying to meet these challenges and I want to thank them for their dedication,” concluded Royer.

Dryden’s pulp production and related forestland activities will remain in operation. Dryden has one pulp line with an annual production capacity of 319,000 air dry metric tonnes.

Domtar will take appropriate measures to assist employees affected by these decisions in accordance with its policies, said the company.

NDP Leader Howard Hampton has called on the government to implement an industrial hydro rate that could reduce costs for the forestry industry and save jobs.

“A mill that five years ago employed 1,100 people is now down to 300. When will the McGuinty government finally realize that Ontario desperately needs an industrial hydro rate, like they have in Quebec, Manitoba and Germany, to help sustain good manufacturing jobs?” asked Hampton during yesterday’s Question Period.

On Tuesday, Domtar closed its Dryden mill—the last free sheet paper mill remaining in Ontario.

With 10 uncoated free sheet paper mills in operation in the United States, Ontario continues to harvest wood fibre, run it through pulp mills and ship it south of the border where all the value-added production jobs now are, noted Hampton.

“The McGuinty government is taking us back to the 1940s, when wood fibre was harvested in Ontario and the value-added production was done in the United States,” said Hampton.

“Having a reasonable industrial hydro rate says that we value electricity for jobs, that we value it more than we value electricity for someone running an inefficient bar fridge,” he added.

Forestry industry associations, unions and Northern mayors have all pointed to Ontario’s high industrial hydro rates as a significant factor in job losses across northern Ontario, said Hampton.

Under the McGuinty government rising electricity costs have contributed to the loss of 40,000 direct and indirect resource jobs across northern Ontario.

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