Domtar Paper Co., a part of the Paper Excellence Group and currently the largest integrated manufacturer and marketer of uncoated freesheet paper, plans to upgrade and expand its pulper in Hancock County, Kentucky. The $51 million project is expected to retain over 400 jobs.

The investment will include a modern pulper to gain additional machine capabilities and better service growing markets. The expansion is scheduled for operation by the end of 2025.

“Domtar is pleased to partner with the Kentucky Economic Development Finance Authority to support the Hawesville mill’s modernization, offering the ability to produce innovative fiber-based products that are growing in demand,” said Hawesville mill manager Murray Hewitt. “Additionally, it promotes stable employment and maintains the Hawesville mill’s standing as a pillar of the community that it has served for over 50 years.”

To encourage investment and job growth in the community, the Kentucky Economic Development Finance Authority (KEDFA) in April preliminarily approved an incentive agreement with Domtar under the Kentucky Reinvestment Act (KRA) program. The agreement can provide up to $1.2 million in tax incentives based on the company’s investment of $51 million and a 90% job retention rate.

“Domtar Paper Co. has successfully produced sustainable paper in Kentucky for decades and is positioned for even more growth in the future with this modernization,” noted Governor Andy Beshear. “I want to say congratulations to Domtar on this expansion and thank the company for its longstanding presence in the commonwealth. I’m excited to see the company continue to thrive and grow in Hancock County.”

Additionally, KEDFA approved Domtar for up to $100,000 in tax incentives through the Kentucky Enterprise Initiative Act (KEIA). KEIA allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing.

By meeting its annual targets over the agreement term, the company can be eligible to keep a portion of the new tax revenue it generates. The company may claim eligible incentives against its income tax liability and/or wage assessments.

“The Hancock County Industrial Foundation is excited to see another investment in our local manufacturing sector,” added Hancock County Industrial Foundation Director Mike Baker. “Domtar is a leading corporate citizen of our community, and this investment is another step in their continued growth, success and sustainability. For over 50 years, they have been a leader in our manufacturing community, and this is another validation of the employees and this plant’s commitment to excellence.”

Founded in 1848 Domtar is a leading provider of a wide variety of fiber-based products, including communication, specialty and packaging papers, market pulp and airlaid nonwovens.