Domtar to divert pulp to Ontario mill Port of Eastport to see less business in ’05

BAILEYVILLE – Officials at Domtar Industries Inc.’s pulp and paper mill said Friday they plan to ship about 15 percent less pulp through the Port of Eastport in 2005.

But the decision does not mean Domtar’s pulp and paper mill will produce less product. It means the pulp is being sent to a sister mill in Cornwall, Ontario.

Debby Feck, general manager of the Baileyville operation, said Friday that Domtar announced in December that it would shut its pulp mill in Cornwall, but continue to run “a couple” of paper machines.

Feck estimated that up to 40,000 tons of pulp is earmarked for Canada this year. “It doesn’t mean that we don’t want to use Eastport, but anytime we can do domestic business especially for our own mills, it makes sense to do,” Feck said. Domtar is based in Montreal.

The Baileyville mill produces about 500,000 tons of pulp a year. “To be honest with you if I cannot ship to Asia and I can ship somewhere locally, it’s cheaper,” she said.

Although less pulp will be shipped through Eastport, the port is coming off a banner year. Last year, 327,000 tons were shipped out. This year the number will be around 277,000 tons.

George “Bud” Finch, chairman of the Eastport Port Authority, said the port has experienced “the great benefits” from four years of record tonnage being shipped from Domtar. “We are well-positioned for the reduction, as we budgeted 250,0000 tons” for the 2005 fiscal year, Finch said Friday. Finch is also the Eastport city manager.

“At 277,000 tons, 2005 will still be one of the top five years for exportation through the port,” he said. “While I expect the relationship between the port and Domtar to continue to strengthen over time, I also recognize the pulse of the industry is competitive and will face fluctuations from year to year as the economy dictates.”

Feck said Domtar still prefers the Port of Eastport over the Port of Saint John, New Brunswick. “We’ve really kept all the business here,” she said. “We want to and they do a heck of a job, they are a great group.”

There are more changes ahead at the mill, Feck said.

Beginning the second half of 2005, the mill will produce about 20,000 tons of softwood pulp, which means the mill no longer will have to buy it. “It is just for internal consumption, but when you make softwood and use it you’re not making as much hardwood,” she said.

Feck explained that Domtar paper is about 90 percent hardwood and 10 percent softwood pulp. “What we want to do is make it ourselves with chips. So we will make softwood for our own paper machine and continue making hardwood for the pulp market as well as our own paper machine,” she said.

Although less pulp will be going through the port, Skip Rogers, general manager of Federal Marine Terminals Inc., the company that handles shipments, said the drop in tonnage will not have an impact.