Uncoated freesheet paper manufacturer Domtar Corp. (UFS,UFS.TO) announced Friday that it has formed a new joint venture company with privately-held FPInnovations, a non-profit wood products research and development company, to construct a one metric ton per day commercial-scale nanocrystalline cellulose demonstration plant at Domtar Windsor, Quebec pulp and paper mill site.
The construction is expected to commence in the coming weeks and is anticipated to take about 20 months to be completed.
The cost of construction is estimated to be nearly C$32.4 million and operating costs are expected at C$8.4 million, for a total investment of C$40.8 million. Domtar stated that C$12 million of its total contribution has been submitted for funding approval under the Canadian Government's Pulp and Paper Green Transformation Program.
Natural Resources Canada and Quebec's Natural Resources and Wildlife Ministry will be contributing C$10.2 million each to FPInnovations' portion of the funding. Domtar stated that all funding are still subject to approval.
The project is expected to provide around 50 jobs. Domtar added that nearly 10 permanent positions will be needed to operate the plant, and various researchers and scientific personnel have been and will continue working to deliver on the new nanocrystalline cellulose applications and products.
As per the joint venture deal, following the construction phase, both Domtar and FPInnovations will be exploring the commercial viability of the production of nanocrystalline cellulose on a larger commercial scale.
Nanocrystalline cellulose is a renewable, recyclable and abundant nanomaterial made of cellulose fibers from wood pulp manufacturing process.
Domtar says, "Potential applications include optically-reflective films, high-durability varnishes, and innovative bioplastics. The properties of this material will provide new opportunities in a wide range of applications for a variety of sectors and markets such as the aerospace, automotive, chemical, textile and forestry industries. There are promising applications for the aerospace industry that will complement Quebec's innovative aerospace "green" aircraft program."
UFS is currently trading on the New York Stock Exchange at $48.38 per share, down $1.30 or 2.62%, on a volume of 92,244 shares. In the past 52-week period, the stock traded in a range of $14.60 to $79.00, with an average three-month volume of 1.17 million shares.
UFS.TO is currently trading on the Toronto Stock Exchange at $51.20 per share, down $0.40 or 0.78%, on a volume of 17,760 shares. In the past 52-week period, the stock traded in a range of $16.36 to $79.36, with an average three-month volume of 55,883 shares.
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