For more than 100 years, Domtar’s Kingsport Paper Mill has been a proud employer and community partner in the city of Kingsport, TN and the surrounding area, not only as a large employer, but also a supporter of local vocational education, environmental sustainability and civic and recreational programs that enhance the daily lives for their neighbors.
Domtar, which is one of the largest integrated manufacturers of uncoated freesheet paper in North America, continues to invest in the local Kingsport community. The company announced a $350m plan to convert the Kingsport Mill to produce 100% recycled containerboard grades targeted at independent corrugated converters across North America. This investment will make the facility home to what is believed to be the second-largest recycled containerboard machine in North America, producing nearly 600,000 tons of high-quality recycled papers.
Steve Henry, Domtar’s Senior Vice President of Packaging, explained that the decision to convert this existing paper mill finally comes to fruition after years of studying the containerboard marketplace. Domtar CEO, John Williams’ experience in the European packaging market, as well as Henry’s experience working with companies like Georgia Pacific and International Paper, led them to explore this new long-term strategic plan to build a large and cost-competitive packaging business.
Multiple Mill Conversions
In 2018, the company launched its asset conversion roadmap, which identified four of Domtar’s 13 pulp and paper mills, including Kingsport, that could be converted to containerboard over time. Other mills that were chosen for possible conversion, in addition to the Kingsport Mill, include Ashdown, AR, Marlboro, SC, and Hawesville, KY.
“We didn’t view it as a sprint necessarily, but more of a 10-year roadmap, showing the potential of 2.5-million-ton containerboard system at the end of the journey,” said Henry. “Our decision was driven by the fact that you cannot just convert an asset and hope that the market is there. We really took the time to study the containerboard market and look at how needs are being met and the unmet needs of independent converters.”
Domtar has leveraged their customer relationships to identify a compelling value proposition with the independent converters. Domtar will not own or operate competing box plants. They found that independent converters were looking for long term competitive suppliers that they can rely on to truly be their partner and an extension of their business.
“Global and local customers are looking for sustainable packaging solutions. The global customers know they can get different packaging solutions from Europe and elsewhere, and have expressed frustration that they can’t always get those options here in North America,” said Henry.
Land Swap
Domtar announced in August 2020 the plans to convert the Kingsport Mill from uncoated paper production to the company’s first containerboard facility, with hopes of becoming one of North America’s leading lightweight recycled containerboard suppliers. As a necessary part of the mill conversion, Domtar and the city of Kingsport agreed to swap land parcels. Through this effort, the city will receive 40-acres of land and Domtar will receive Domtar Cloud Park. They’ve also agreed to contribute $500,000 toward relocating a community Skate Park that is currently located on the land.
Repurposing the site will be an extensive process. Demolition work began in November 2020 and all major pieces of equipment have been purchased, preparing the way for eventual construction activities. The project is on schedule to start-up in Q4 of 2022. They’ve begun implementing the operations readiness plans for the Mill start-up and the packaging management teams are in place. Kingsport is expecting to begin bringing employees back at the end of this year or beginning of 2022.
In December, Domtar experienced a devastating loss with the passing of Marty Barfield, following a long illness. Barfield was the general manager of the Kingsport Mill and a key architect of the work system for the new containerboard operation that is under construction. In January, Troy Wilson was appointed Kingsport Mill manager. Joining the Kingsport community from Domtar’s Johnsonburg Mill in Pennsylvania, where he was previously the Paper Mill Manager and also brings significant containerboard experience. Wilson is excited to lead the Kingsport team and carry on Marty’s vision of creating a high-performance culture as they take an exciting next step in the Mill’s presence in Kingsport.
Growing Demand for Recycled Grades
With more daily commodities being delivered in boxes and consumption of packaging materials on the rise, Domtar feels that sustainable paper-based packaging is the right decision and most importantly, helps protect the environment from plastic waste. “We continue to see a greater adoption of recycled grades,” said Henry. “There used to be a more specific selection of recycled grades versus kraftliner, but the industry is constantly learning more on how to build a better box with recycled grades, while preserving the strength of the board in the converting process.”
Henry states that the recycled product has been sourced from the right partners in the region, to secure materials they will need for next year, as an initiative led by Mike Butler, Senior Director of Fiber Sourcing at Domtar.
“Containerboard is a growing business. It grows at about 2% per year and the pandemic has just sped that up,” said Kingsport Mill Manager, Troy Wilson. “People are working from home and ordering online. E-commerce is redefining how we buy. Now, everything comes in a box. I see it growing further as we move along. Domtar had the project planned and a team in place at Kingsport, prior to the Covid pandemic, and the pandemic just reaffirmed that they had made the right business decision.”
Domtar looks to put an emphasis on lightweighting and providing innovative packaging solutions. The Mill will produce a full range of recycled products with basis weights ranging from 18# to 42#, to serve a variety of customers who may be seeking ways to reduce the amount of packaging and moving towards a lower basis weight with exceptional strength and durability.
“We are making sure we take a long-term strategic view of which customers we want to partner with, based on a variety of factors, not just geographic location. Ultimately, we are open to serving all of the North American footprint, as well as exporting some too,” said Henry.
Big Machine
A greenfield OCC plant with fiber fractionation will consume nearly 660,000 tons of recycled material to produce new containerboard . Domtar is utilizing the newest, uncoated free sheet machine in North America which started up in 2003 and working with Voith to upgrade the machine to produce premium recycled liner and medium. The machine has a 340-inch wide trim, which is well positioned to serve 110-inch corrugators. The Voith machine at Kingsport will have the ability to run up to 4,500 feet per minute, making it one of the fastest containerboard machines in North America and the second largest recycled machine in North America. The system will include Voith’s BlueLine products including water, sludge and reject handling systems, which will maximize both efficiency and quality.
“We are confident in Voith’s equipment and expertise as an industry-leading supplier of recycled fiber systems and we are certain their equipment will meet the needs of this new project,” said Charlie Floyd, Vice President, Packaging Strategic Capital, Domtar.
“Domtar and Voith have a longstanding relationship in many areas and we are happy to be partnering with them as they enter the containerboard market,” said David Buchanan, President, Voith Paper North America. “This system will provide the machinery and technology so that their mill will operate with the highest quality fiber with minimum water and energy consumption. With our system, Domtar will be able to produce an excellent sheet quality for their customers.”
Recycled from the ground, up.
Driven by the eco-friendly, sustainable approach that Domtar is known for taking, this mill will feature recycled materials literally from the ground, up. In an effort to weave sustainability into everything they are doing, the ground-up concrete from the demolition will be used to create the base for the new concrete in the facility. Furthermore, the mill will convert byproducts sorted from its OCC supply, like plastics and the remaining short fibers, into steam and electricity to provide energy to the mill. Ultimately, the main goal is to reduce waste of all sorts. This mill will prevent about 50,000 tons of plastic waste from entering landfills each year by instead burning it to produce energy.
Henry described other types of sustainability efforts and initiatives that will be present at the mill. They will become certified by the Sustainable Forestry Initiative® (SFI®) and the U.S. Food and Drug Administration (FDA) for food contact, providing the full value of sustainability.
What’s next for Domtar?
When asked about his thoughts on a potential issue of over saturation in the containerboard market, Henry said, “We’re really focused on the value proposition to independents. We are convinced that there’s a strong market and the need for supply from a strategic partner who isn’t going to compete with them in the market. There’s a spectrum of recycled products available. Some are much higher quality than others. There’s a premier product in the market today and we want to surpass that and provide and even higher quality product and offering to customers.”
On May 11, Paper Excellence, a global diversified manufacturer of pulp and specialty, printing, writing, and packaging papers, and Domtar entered into a strategic business combination under which the Paper Excellence group of companies will acquire all of the issued and outstanding shares of Domtar. After the transaction closes, Paper Excellence intends to continue the operations of Domtar as a stand-alone business entity. As such, Domtar will continue to be led by its management team and Paper Excellence plans to retain its corporate and production locations.
Domtar has experience repurposing mills and Paper Excellence recognizes this and sees the value. Domtar has previously converted the Marlboro, SC, facility to produce lightweight thermal paper grades and the Plymouth, NC and Ashdown, NC facilities to fluff pulp.
