Research
Interview Synopsis

Domtar Corp & the paper pulp market

  • Multi-Asset Class
  • Materials
  • North America

As global demand for paper remains sluggish, Third Bridge Forum interviewed a former director in the paper and pulp division at Domtar to learn how the company is navigating a market that is in flux. 

Click on the hyperlink below to access the full Forum transcript.

Capitalising Pulp and Paper Market Changes

The specialist explained the regional differences in the pulp and paper market, and how the company was positioned to capitalise on these. 

While volumes of uncoated freesheet have been in decline since 2000 in the North American market, in that time the once fragmented industry has consolidated, resulting in much more price discipline. 

But the biggest growth is in Asia, where China is what drives pulp, according to the specialist: “When China buys, or doesn’t buy, it has a big influence on price and volume. And a “challenging” price environment for pulp is in part down to the US-China trade war, which has had a mixed impact. But fluff pulp is known for being “tariff proof”, he said, and this is a growing market. 

One of Domtar’s strengths is understanding the need to take machines out of production. One of the first plants it repurposed was its Plymouth mill, from paper making to fluff pulp. This was followed by Ashdown Mill, where it repurposed one of its largest paper machines to produce fluff pulp. 

There has also been a wider rush by pulp and paper companies to repurpose machines from paper production to producing linerboard or cardboard, which is down to the “Amazon phenomena”, he said. 

With paper declining 3-4% a year, pulp is viewed as going up in terms of demand by 1-2%. But Domtar has also been positioning itself in personal care, particularly in the adult incontinence product market, where growth is predicted to be around 4-6%. 

In this interview, Third Bridge Forum explored whether Domtar’s early leap into the fluff pulp space was the right move at the right time – and whether its decision not to repurpose projects for linerboard or cardboard will see it lagging its competitors. 

To access all the human insights from Third Bridge’s Domtar Corp & the Paper Pulp Market Interview, click below to view the full transcript.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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