By Cameron Chai
Domtar, a manufacturer and marketer of uncoated freesheet paper in North America, has signed a 15-year supply agreement with Appleton, a producer of thermal papers, carbonless papers and Encapsys products. Under the terms of the agreement, Domtar will deliver uncoated base paper to Appleton for manufacture of specialty paper products.
The partnership will provide Appleton with access to high-quality, competitively-priced base paper and will also decrease the company's exposure to unexpected market costs for waste paper and pulp. In addition, the agreement will enable Appleton to highly focus on its core abilities of coating formulations and coating applications and help to expand its leadership in the global thermal paper business. The President and CEO of Domtar, John D. Williams, stated that the agreement provides the company with an opportunity to change high volume paper capacity into specialty papers.
Currently, Appleton manufactures base paper at its mills in Roaring Spring, Pennsylvania and West Carrollton, Ohio. If the company requires additional base paper, then it purchases from other paper manufacturers like Domtar. Appleton also purchases a large quantity of pulp and waste paper for use in its West Carrollton facility.
The purchase of majority of base paper from Domtar will help Appleton to stabilize considerable expenses and to discard old, expensive, non-integrated papermaking assets. The company has proposed to terminate papermaking operations at its West Carrollton mill. Appleton will continue the thermal paper coating operations in the mill.