Future of Espanola, Ont., paper mill uncertain as Domtar continues with plans to sell

The future of the Espanola, Ont., paper mill remains uncertain as its owner, Domtar, moves ahead with plans to sell the facility.

On Dec. 29 the Competition Bureau ordered Domtar to divest itself of some properties ahead of its plans to purchase rival Resolute Forest Products Inc.

"The proposed transaction would result in market shares well above the 35 per cent threshold established in the Bureau's Merger Enforcement Guidelines," the Competition Bureau said in its decision.

To satisfy the merger guidelines, Domtar agreed to sell its Dryden pulp mill and Thunder Bay pulp and paper mill in northwestern Ontario once it purchases Resolute.

Earlier in 2022, in anticipation of the Competition Bureau's decision, Domtar also put its Espanola paper mill up for sale, although it turned out the bureau is not concerned about that plant remaining with the company. 

"We'll proceed in the process that's in place to sell the Espanola facility and we'll see how that turns out," said Domtar spokesperson Bonny Skene.

Skene said she didn't want to speculate on the paper mill's future ownership, but she added it is possible nothing changes.

She added that for now, it's a priority for Domtar to be transparent with its 450 employees in Espanola and community at large. 

"We'll continue to update everybody as we gain new information," Skene said.

"Sometimes it's not all that easy when you don't have all the answers. And so the sale process is in place and we're proceeding through that, but it's too soon to say how that process might unfold."

The company is expected to complete its purchase of Resolute in the first half of 2023, at which point it will need to divest itself of the two mills in northwestern Ontario.