ASHDOWN, Ark. (AP) — Paper company Domtar will not restart operations on its paper machine in Arkansas, putting about 109 employees out of work, the company said.
The paper machine at the Ashdown mill was put on idle in April. Now, the mill will only produce pulp, according to a press release.
“The COVID-19 pandemic and resulting economic slowdown continue to negatively affect demand for communications paper grades. Some recovery in demand for communications paper has occurred as the economy has started to re-open. But unfortunately, Domtar has not seen enough demand recovery to justify restarting operations on the A62 paper machine at the Ashdown Mill," said Tammy Waters, manager for communications and government relations at the Ashdown mill.
Waters added that the company will continue assisting employees and their families, the Texarkana Gazette reported.
Domtar had an operating income of $14 million for the second quarter of 2020, according to figures released by the company Friday. The first quarter's operating income was $19 million.
Depreciation and amortization totaled $71 million in the second quarter, according to the financial report. Paper shipments were down 32% from the first quarter and pulp shipments increased 10%.
To save costs, the company will also shutdown the uncoated freesheet production at Tennessee and Michigan mills and the converting center located in Tennessee.
“We are taking the appropriate steps to optimize our operations and to remain an agile, reliable partner to our customers,” said John D. Williams, President and Chief Executive Officer, in a release from the corporate office. “Despite the significant challenges we faced in pulp and paper markets, we have been able to manage costs while initiating cash and cost conservation initiatives across the network.”