John Williams, President and CEO of Domtar, opened Wednesday of PaperWeek with a keynote address that in many ways sets the tone for the transformational mode that the Canadian forest products industry is in right now, while still holding a strong position in its traditional pulp and paper markets.
Williams points out that the industry and Domtar have a fine and proud legacy in Canada. As an example, Domtar, along with PAPTAC, is celebrating its centenary as Montreal-based organization.
But the winds of change have already taken hold at Domtar and Williams likens it to braking and accelerating at the same time. How so? While Domtar is the number one uncoated freesheet producer in North America and has the pulp fiber mills to support that position the traditional markets are declining at a projected rate of 3 to 5% a year. That's the braking, or at least the slowing part. But the acceleration part is in new ventures such as fiber-based personal care products. Transforming wood fiber into useful everyday products is Domtar's transformational mode of operation these days, explains Williams.
Nevertheless, Domtar is still committed to the traditional segment of its business. "Domtar is not moving away from our core business – it is essential," says Williams. In fact the company is adjusting to new market demands such as credit card and debit card receipts. And it is promoting its core products through innovative and compelling product promotions under the "Paper Because" slogan, some of which were shown to the overflow audience. He explains that paper nowadays must have an appropriate use. And it does have an emotional connection.
Domtar walks the talk by investing in its core business. He says that the company is investing $300 million per year in capital equipment improvements and core asset maintenance.
But the major changes are in the consumer product field that is the expected source of future growth. "We need this to offset the core product demand," says Williams. Indeed, the company has recently invested 1$1.5 billion in infant and adult incontinence diaper products as that is an $ 8 billion dollar a year business growing at a projected 5% per year until 2050. The company has also invested in fluff pulp production at its Plymouth, NC mill to provide some of the raw materials in a forward-integrated fashion. The aggressive investment strategy means that 20% of Domtar's sales are from personal care products while it was zero just a few years ago.
Domtar is also investing in forward looking innovations such as valued-added products from lignin and nanocellulose. Williams says these products should be valuable in the future and are part of the company's strategy to make small bets on the future without betting the farm.
Domtar is firmly behind sustainable practices but the company must actually behave in such a way. "It is not just marketing, "adds Williams. "Customers must understand we are the stewards of the forest," he concludes.
An interview with John D. Williams: From core to consumer products
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