Domtar's merger with Paper Excellence is expected to complete at the end of the year. The sale of the Kamloops pulp mill is expected to follow in the spring (Image Credit: CFJC Today)

By Chad Klassen

DOMTAR SALE

Kamloops pulp mill, union don’t anticipate changes with new owner

Nov 19, 2021 | 3:51 PM

KAMLOOPS — The Kamloops pulp mill has been operating in the city since 1965 and it has seen many changes. Weyerhauser bought it in 1971, then sold it to Domtar in 2007.

Another big change is coming with Paper Excellence merging with Domtar, a sale that’s expected to close by the end of the year.

Then, the pulp mill will be put on the open market sometime in the spring, in need of a new owner.

“There will be a requirement, for competition reasons, now that we know the Kamloops mill will be sold to ensure that no party has an unfair advantage,” noted Domtar spokesperson Bonny Skene. “It will be important to ensure the Kamloops pulp mill is separate from the rest of Domtar. Procedures and standards and protocols will be put in place so that it operates fairly independently during that stale period.”

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Skene says requiring a third party to buy Domtar addresses the government’s concern around competition for wood fibre in the region.

“The [Canadian] Competition Bureau, as the regulator, is always focused on ensuring free and fair competition in any sector. As they reviewed the transaction, they determined that the Kamloops mill needed to be owned by a separate party from Domtar so as to not concentrate too much power or authority over fibre in the region.”

Despite the pending sale of Domtar, the president of the local union doesn’t believe it will change anything at the Kamloops operation.

“Our collective agreement’s in place. Jean-Claude (Allaire), our mill manager, has said that won’t be tampered with. The CBA will be maintained,” said President of Unifor Local 10B Rene Pellerin. “Then when we get a new owner, we’re currently doing pulp bargaining with Canfor so the new employers will have to go through the bargain. We don’t know how long it will take for the sale to be done — it could be three to six months — but we don’t forsee any changes.”

Pellerin says the mill is running smoothly and it has a good supply of fibre to feed the operation, which should be attractive for any potential buyer.

“Domtar has invested money in the mill and they’ve maintained it well. We have a good fibre supply and a good customer base, so all those together make for success going forward,” he said. “If there are some factors missing out of that, then I’d be a bit worried, but for the most part everything’s right in line for a good sale. Whoever buys it, in my opinion, they’ll be buying a great mill.”

Skene says Domtar has worked hard over the years to ensure the Kamloops mill is competitive — with good fibre supply — and she feels the company has achieved that.

“It’s a highly competitive mill, so those are things that bode well for the Kamloops mill and for the Kamloops community,” she said. “It’s a competitive mill, it’s run sustainably, and I think it’s fair to say that the expectations are that will be attractive to a potential buyer.”