Domtar Corporation’s board of directors approved a $160 million capital project to convert a paper machine at its Ashdown, AR, mill to a high quality fluff pulp line used in absorbent applications such as baby diapers, feminine hygiene and adult incontinence products. The planned conversion is expected to come online by third quarter 2016 and will allow for the production of up to 516,000 metric tons of fluff pulp per year once the machine is in full operation. The project will also result in the permanent reduction of 364,000 short tons of annual uncoated freesheet production capacity in the second quarter of 2016.
 
“The fluff pulp conversion project at the Ashdown mill is an important step in advancing our strategy to generate $300 to 500 million of EBITDA from growth businesses,” says John D. Williams, chief executive officer. “We are expanding our presence in a growing business that will allow us to support our top‐tier supplier position with some of the world’s largest producers of absorbent hygiene products. Once completed, Ashdown, together with our Plymouth mill will provide a platform to further strengthen our leading position as an effective producer of high quality fluff pulp with nearly one million tonnes of total production capacity.”
 
Mr. Williams adds, “The conversion of the paper machine in 2016 will further help balance our supply with our customers’ demand. In the interim, the flexibility of the two remaining paper machines at the Ashdown mill allows us to take measured steps to adjust our paper production while selling papergrade pulp.”
 
The conversion work is expected to begin during Q2 2016 and the fluff pulp line is scheduled to start‐up by Q3 2016. The cost of conversion will be approximately $160 million of which $40 million is expected to be invested in 2015 and $120 million in 2016. The company will also invest in a pulp bale line that will provide flexibility to manufacture papergrade softwood pulp, contingent on market conditions.