October 20, 2009 / 12:58 PM / in 8 years

UPDATE 1-Domtar's North Carolina mill to make fluff pulp

* Cuts FY uncoated freesheet production by 200,000 tons

* Says conversion will require $73.5 mln investment

* FY fluff pulp making capacity up to 444,000 metric tons

Oct 20 (Reuters) - Forestry firm Domtar Corp (UFS.TO) (UFS.N) said it will convert its Plymouth, North Carolina, mill to a fluff pulp production facility, reducing its annual uncoated freesheet production capacity by about 200,000 tons.

Domtar said the conversion will require a $73.5 million investment, and would boost its annual fluff pulp making capacity by almost threefold to 444,000 metric tons.

The mill reconfiguration will help preserve about 360 positions, Domtar said.

"The redirection of orders to other paper mills in our system will help bring up operating rates and lower manufacturing costs," chief executive John Williams said in a statement.

Domtar shares, which have gained more than 8 percent in the past month, closed Monday at C$45.75 on the Toronto Stock Exchange. (Reporting by Krishna Chaithanya in Bangalore; Editing by Anil D'Silva)

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