Domtar To Invest For Second Generating Unit At Windsor Mill

Domtar Corporation (TO:UFS) , a leading fiber-based technology company, recently announced that it will invest $36 million for setting up a second generating unit at its Windsor (Quebec) Mill. This unit will have a generation capacity of 18 MW.

The new unit will help the company curb its production cost and improve energy efficiency at the mill. The company’s Windsor mill got its first power generating unit, with a capacity of 30 MW, in 2001. The power unit showcases the company’s willingness to innovate and provide sustainable development.

The installation of the second power generating unit will make the Windsor mill the prime producer of renewable energy in the Eastern Townships. The two power units will have a combined production capacity of approximately 50 MW, equivalent to powering 12,800 single-family households.

The new unit is likely to start functioning by the summer of 2017. This project will help in the development of the forestry sector and the management of forests in the Eastern Townships.

Headquartered in Montreal, Canada, Domtar is a leading fiber-based technology company with a unique expertise in transforming raw materials into products that suit customer requirements. It is currently seeking growth through profitable investment opportunities with a commitment to pollution-free environment and sustainable practices. The company is also streamlining the cost structure, improving revenue quality and maintaining a healthy cash flow with a disciplined approach to cash utilization.

The company, however, faces tremendous competitive pressure from local as well as some global producers, who often have relatively greater financial resources and lower production costs. As a result, Domtar has to make continuous investments in value drivers, which reduce its profitability to some extent.

Domtar carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Clearwater Paper Corporation (NYSE:CLW) , Neenah Paper, Inc. (NYSE:NP) and Resolute Forest Products Inc. (NYSE:RFP) . All three stocks sport a Zacks Rank #1 (Strong Buy).