Domtar Corp. is looking to contract out an element of its Kamloops pulp mill to a third-party supplier.
Spokeswoman Bonny Skene said the company, which has operations in Canada and the United States, is seeking a partner to build, operate and maintain an oxygen plant at the Mission Flats Road mill to replace the current facility, which is about 18 years old.
The measure is possible under a recently signed deal with Unifor Local 10b, which represents unionized workers at the pulp mill. The agreement also allowed for new apprenticeship opportunities at the mill.
The replacement plant will not add any jobs nor increase production to what is now a single pulp line.
Design work will be undertaken next year, with tentative plans to have the plant operational in 2016.
Skene said Domtar plans to continue “incremental improvements” to the Kamloops mill, but noted there are no plans to expand production.
Domtar announced two years ago it was shutting its A line, resulting in job loss for about 125 workers. The A line produced pulp sawdust, Softwood pulp is produced on the mill’s B line.
Since then, the mill has hired back all those workers who were on a recall list. The Kamloops mill employs about about 330 workers.
Kevin Mason, a pulp analyst with Equity Research, said pulp prices remain healthy and said there is a growing market for tissue around the world. Several European countries are seeing investment in softwood pulp mills but, thus far, there have been no new plants or significant expansions in North America.
“For Domtar, with a position in softwood, it would be something to consider,” Mason said.
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