Domtar Named a Winner in the Beyond the Bag Challenge

Domtar has been honoured as one of the winners of the Beyond the Bag Challenge, led by the Consortium to Reinvent the Retail Bag — a collaboration convened by Closed Loop Partners with leading retailers, environmental partners, global design firm IDEO and others. The challenge attracted more than 450 global participants, and nine winners were announced on Feb. 16.

Paper-Based Material Impresses Bag Challenge Judges

The bag challenge asked participants, “How might we transport goods from retailer to destination in a way that is compatible with diverse retail systems, delivers ease and convenience for customers and reduces environmental impact?”

Following a period of review and selection with the consortium partners, Domtar’s submission was one of just 58 that made it to the Ideas Shortlist. Afterward, a panel of expert external judges, the consortium founding partners, sector lead partners, environmental advisory partners and Closed Loop Partners convened and further reviewed the shortlisted submissions to select the top ideas.

Though 100% cellulose fiber–based, Domtar’s winning submission boasts properties not commonly associated with paper:

  • Stretchable — This unique product stretches and flexes up to 40%.
  • Strong — The durable material is stronger than conventional kraft bag paper.
  • Lightweight — Domtar’s material is up to 47% lighter than conventional bag paper.
  • Sustainable — This paper is responsibly sourced and curbside recyclable after its intended end use.

The result is a lighter weight carrier bag material with superior qualities, reduced material content and a lower environmental impact.

Why the Retail Bag Needs Reinventing

For decades, the single-use plastic bag reigned as the dominant design solution for one of the most common human activities: getting a purchase home. But that popularity comes at a great cost. Almost all plastic bags end up in a landfill, are incinerated or leak into the environment as trash. In contrast, Domtar’s unique material is made from a renewable resource, and paper remains one of the most recycled products on the planet.

Innovation a Top Focus at Domtar

Domtar’s Catapult team, which includes individuals from market development and new technology innovation, engages in projects seeking to translate evolving market needs into innovative fiber-based products. “A key component of how we win is by uncovering needs and seeing opportunities that are aligned with Domtar’s core competencies, then translating those needs into innovative and/or improved products and services,” says Katie Zorn, senior director of strategic planning and market development.

Indeed, the Beyond the Bag Challenge-winning material is just one of several promising projects the Catapult team is involved with related to innovative fiber-based processes and products. While R&D moves ahead and conversations to bring this innovative product to market continue, mounting public interest in products made from sustainable wood fiber shows no signs of slowing down. With extensive experience in pulp and paper, Domtar remains well-positioned to address this trend.

“Domtar is excited to know that the Consortium to Reinvent the Retail Bag partners are committed to real and long-term sustainable change in carrier bags,” says Krista Kozachanko, senior specialist, innovation technology. “By understanding consumer, retailer and environmental needs, Domtar has presented a circular solution that will have a lasting impact on the way we carry purchased goods.

Source: Domtar


Domtar Quarterly Report: Q4 and FY 2020 Financial Results


On February 11, Domtar reported a net loss of $59 million for the fourth quarter of 2020 compared to a net loss of $92 million for the third quarter of 2020, and a net loss of $34 million for the fourth quarter of 2019. Sales for the fourth quarter of 2020 were $0.9 billion.

The fourth quarter 2020 results include an after-tax loss of $43 million from discontinued operations related to the announced sale of the Personal Care Business, compared to earnings of $19 million for the third quarter of 2020 and earnings of $10 million for the fourth quarter of 2019.

Excluding discontinued operations and the items¹ listed in the full media release, the Company had earnings from continuing operations before items¹ of $19 million for the fourth quarter of 2020, compared to loss from continuing operations before items¹ of $1 million for the third quarter of 2020 and loss from continuing operations before items¹ of $9 million for the fourth quarter of 2019.

Fiscal Year 2020 Highlights

For fiscal year 2020, net loss amounted to $127 million, compared to net earnings of $84 million for fiscal year 2019. The Company had earnings from continuing operations before items¹ of $1 million for fiscal year 2020, compared to earnings from continuing operations before items¹ of $149 million for fiscal year 2019. Sales were $3.7 billion for fiscal year 2020.

Quarterly Review

“Our paper shipments were in line with the third quarter and order activity remained stable across all channels, while paper pricing was consistent with the year-to-date average. In Pulp, we improved our cost performance, which is attributable to lower maintenance costs, our cost reduction program and favorable wood costs. Market fundamentals continue to improve, and we announced several pulp price increases in the first quarter of 2021.” said Daniel Buron, senior vice president, chief financial officer and acting chief executive officer.

Mr. Buron added, “In Personal Care, we had a strong finish to the year with improved fourth quarter performance driven by strong sales of adult incontinence products in North America and a good performance in Europe following the seasonality impact of the softer summer period. We announced the sale of the Personal Care Business to American Industrial Partners for $920 million, and we expect the transaction to close in the first quarter of 2021.”

Operating loss was $20 million in the fourth quarter of 2020, compared to an operating loss of $152 million in the third quarter of 2020. Depreciation and amortization totalled $53 million in the fourth quarter of 2020.

Operating income before items¹ (list in full media release) was $35 million in the fourth quarter of 2020, compared to an operating income before items¹ of $27 million in the third quarter of 2020.

The decrease in operating loss in the fourth quarter of 2020, compared to the prior quarter, was the result of lower long-lived asset impairment and closure and restructuring charges related to the cost savings program, lower maintenance costs, favourable productivity and lower selling, general and administrative expenses. These factors were partially offset by lower volume in pulp and paper, lower average selling prices for pulp, higher freight and other costs and unfavorable exchange rates.

When compared to the third quarter of 2020, manufactured paper shipments were down 1% and pulp shipments increased 14%. The shipment-to-production ratio for paper was 98% in the fourth quarter of 2020, compared to 105% in the third quarter of 2020. Paper inventories increased by 10,000 tons and pulp inventories decreased by 3,000 metric tons when compared to the third quarter of 2020.

Outlook

In 2021, paper demand remains uncertain and dependent upon the COVID-19 recovery, in particular quarantine measures impacting the return to office and school. We expect near-term pulp markets to gradually improve driven by better demand, maintenance outages and restocking in China. Overall raw material costs are expected to moderately increase and freight costs are also expected to be higher.

For more information on this Domtar Q4 and 2020 financial report, please read the full press release. 

1 Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in the appendix.

All information from the Domtar Q4 and Fiscal Year 2020 financial report is in U.S. dollars, and all earnings-per-share results are diluted, unless otherwise noted.

Source: Domtar