ASHDOWN, Ark. (KTAL/KMSS) – Domtar Paper Mill Company is permanently idling its paper mill in Ashdown, Arkansas, and laying off 109 employees.

The plant been idle since April, when 140 were placed on temporary layoff.

News of the permanent shutdown of operations on the A62 paper machine at the Ashdown mill comes as the company moves forward with cost-cutting measures in response to the economic slowdown caused by the COVID-19 pandemic.

The company says there has been “some recovery” in demand for communications-grade paper made at the plant as the economy has started to reopen.

“But unfortunately, Domtar has not seen enough demand recovery to justify restarting operations on the A62 paper machine at the Ashdown Mill. Therefore, we have decided to permanently idle the A62 paper machine to maintain a balance between our production needs and our customer demand. With this line closure, the mill will now solely produce pulp.”

As a result of this decision, the company says approximately 109 employees will be separated.

“We will continue to assist and care for our employees and their families during this time,” read a statement from the company confirming the decision Monday afternoon.

According to the company’s quarterly earnings report released Friday, Domtar is also permanently closing their uncoated freesheet manufacturing plants at theeir Kingsport, Tennessee and Port Huron, Michigan mills as part of their cost savings plans. But they plan to invest in the Ashdown mill by converting it to 100% softwood and fluff pulp, which they say will require $15 to $20 million of capital investments and will take 12 to 14 months to implement.

“The mill will produce additional market hardwood pulp until it converts the fiberline to softwood pulp. The conversion of the fiberline to 100% softwood is also necessary for an eventual expansion into containerboard. Following the fiberline conversion, Ashdown will be a world-class market pulp mill with annual production capacity of 775,000 tons of fluff and softwood pulp.

With these two conversions, Domtar continues to deliver on its strategic roadmap to make value-creating investments in its world-class facilities, and to this end, provides a bright future for the Kingsport and Ashdown mills,” according to the quarterly report.