Prime Minister Stephen Harper announces government support for major upgrade at Domtar Dryden Pulp Mill

May 22, 2010

Dryden, Ontario – Prime Minister Stephen Harper today announced that the Domtar Dryden Mill will receive funding under the Pulp and Paper Green Transformation Program (PPGTP) for two capital improvement projects that will increase the mill’s operational efficiencies and its production of green, clean electricity.

The Prime Minister made the announcement in Dryden where he was participating in celebrations marking the centennial of the city.  He was accompanied by Greg Rickford, the Member of Parliament for Kenora.

“The pulp and paper industry has been an important part of Dryden since it became a town back in 1910,” said Prime Minister Harper.  “We are proud to mark the centennial of the city by helping ensure the Dryden Mill remains efficient, competitive, environmentally friendly and open for business well into the future.”

“As the largest recipients of funding under the program we thank the Government of Canada for investing in our industry.  We are excited to move forward with important upgrades to our eligible Canadian operations with both environmental and economic benefits for the communities in which we operate, as is the case in Dryden here today,” said John D. Williams, President and Chief Executive Officer of Domtar Corporation

The capital investments being supported today will increase the mill’s annual production of electricity by more than 128,000 mega-watt hours, nearly balancing the mill’s production and consumption of electricity.  This will result in the offset of tonnes of greenhouse gas emissions annually.

Domtar is one of 24 pulp and paper companies across Canada that qualified for credits under the Pulp and Paper Green Transformation Program.  The program was created to support environmental improvements in the pulp and paper industry.

Today’s announcement complements initiatives that are being delivered under Canada’s Economic Action Plan to sustain and improve the forest industry in Canada.  Budget 2010: Leading the Way on Jobs and Growth is delivering support over four years to the development, commercialization and implementation of advanced technologies in the forest sector.  This investment is helping create a world-class industry able to compete in the clean energy economy of tomorrow.

In addition, the Government of Canada has committed funds to the development of next-generation forest products and the expansion of global markets for Canadian forest products.
 


Backgrounder

DOMTAR DRYDEN MILL


The Government of Canada is committed to promoting technologies that enhance energy efficiency and the production of renewable energy.  The Pulp and Paper Green Transformation Program (PPGTP) is part of a forest sector transformation and renewal that is laying the groundwork for a greener, more prosperous future for Canada’s pulp and paper sector.

Domtar will use the $22.7 million in federal funding being provided for its Dryden Pulp Mill under the PPGTP to increase the mill’s operational efficiencies and its production of green, clean electricity.  This will be accomplished by:

• Installing a second steam condenser to operate its wood waste boilers at a higher capacity and its turbine more efficiently.  This measure is expected to produce an additional 43,000 mega-watt hours (MWh) of electricity per year.
• Installing a second high pressure turbogenerator to increase the production of renewable electricity through use of high pressure and high temperature steam generated by the recovery boiler.  This measure is expected to produce an additional 85,400 MWh of electricity per year.

These upgrades will eliminate the need for Domtar to purchase over 11 MWh of power.  This will nearly balance the mill’s production and consumption of electricity, enhancing the mill’s environmental and commercial sustainability.

The Dryden mill has been in operation since 1911 and was acquired by Domtar in 2007.  The mill produces bleached softwood kraft pulp and handles chipped fibre through to finished pulp production and packaging.  It also deals with a range of chemical treatment processes, as well as water and effluent treatment.


How the Pulp and Paper Green Transformation Program Works

The Pulp and Paper Green Transformation Program provides companies with credits based on their use of black liquor ($0.16/litre) between January 1, 2009, and December 31, 2009.  Black liquor is a liquid by-product of the pulping process used to generate heat and power.
 
Firms then have until March 31, 2012, to draw on these credits to finance approved capital projects that offer demonstrable environmental benefits, such as improvements to their energy efficiency or their capacity to produce alternative energy.  The program is capped at $1 billion and total payments to Canadian industry will not exceed this amount.

Thirty-eight pulp and paper mills across Canada, representing 24 companies, generated credits under the Pulp and Paper Green Transformation Program based on their 2009 production levels of black liquor.

By investing in clean energy technologies, this program is helping the forest industry contribute to the growth of a domestic clean energy industry, creating and maintaining high-quality jobs for Canadians, and helping to protect and preserve our environment.

More details about the program and its eligibility requirements are available at http://cfs.nrcan.gc.ca/subsite/pulp-paper-green-transformation.
 
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