2. Table of Contents
Introduction ............................................................................................................................................ 3
History, structure & size of company...................................................................................................... 4
History ................................................................................................................................................. 4
Structure and Size ............................................................................................................................... 4
Services provided ................................................................................................................................ 4
Revenues from each (proportion, trends) .......................................................................................... 5
Market share, level of recognition, success measures ....................................................................... 7
Competitors ........................................................................................................................................ 7
Industry sector comparison .................................................................................................................... 8
Labour issues related to convergence .................................................................................................... 8
Neo-liberalization of media industries................................................................................................ 8
Globalization ....................................................................................................................................... 8
Nationalism ......................................................................................................................................... 8
Technology .......................................................................................................................................... 9
Conclusion: .............................................................................................................................................. 9
References .............................................................................................................................................. 9
3. Introduction
Domtar Corporation is a sustainable paper company of uncoated free sheet paper in North
America and is considered as the second largest in the world based on the paper production
capacity. It is also a manufacturer of paper grade pulp which has quite good demand in the
world. Domtar Corporation is a profitable public company, owned independent and based in
Canada. The pulp and paper industry is growing at a quite good rate in the world and out of
them Canada is considered as at top 5th position and produces of 12787,000 ton paper
(excluding pulp) yearly based on the RISI statistics data. Wood is used as raw material to
produce the pulp, paper, board and cellulose based products as because these are in high
demand. The paper industry is mostly dominated in the United States, Canada, Finland,
Sweden, North West Russia, Japan, China, Korea, Australia, and Brazil.
In these countries there is significant amount of pulp and paper produced but in Canada this
Industry is quite good and contributing in the GDP of the country. This industry is always
criticized by the environmental groups in the world like Natural Resource Defense Council
because of the deforestation and also cutting of the natural old forest. Due to these the
environmental issues has been created such as increase in pollution, not raining on time,
global warming and animal deaths etc. Domtar Corporation has taken some important step in
order to qualify the paper industry and minimum loss to the human, animal and other natural
resources because of the environmental issues. This report analyse the paper industry of
Domtar Corporation with labour issue and industry related comparison.
4. History, structure & size of company
History
In year 1848, Henry Potter Burt founded a timber against rot from moisture firm in England
named as Boulton Holdings Ltd. This company used the wood products or creosote produced
from coal tar to increase the timber’s life but after some time the firm acquired the Quebec’s
mill of paper and started the production of the paper in North America. Increasing demand of
treated wood because of increase source of coal tar, in year 1903 there was formed a firm
named as Domtar Corporation. Soon after in the early 21st century this company became the
largest industry in the North America and second largest industry in the world for the paper
and pulp related products and services.
Structure and Size
In the recent years, the firm has now became globally and now established its business to the
50+ countries worldwide and have 9100+ employee in the firm, the approximate revenue of
the firm is USD $ 5.6 billion. Currently there are five executives of the firm named as Mr.
John D. Williams BA, Mr. Daniel Buron, Mr. Michael Edwards, Mr. Patrick Loulou and Mr.
Richard L. Thomas, who have the immense experience in the paper and pulp industry and
related activities.
Services provided
Domtar Corporation offers different pulp and paper related services and produces related
products. The firm designs, manufactures, markets and distributes a large number of range of
the fibre based and related products. It manufactures the uncoated free sheet paper in USA
and Canada, also market the paper to these countries primarily. The paper is distributed to the
individual customers through the different merchants and retail outlets of the pulp and paper
industry. There are three main segments in the sustainable paper industry, such as pulp, paper
and sheet which has three business units in the industry as manufacturing, sale and
distribution for the packaging of papers, distribution of papers, and recycling of papers.
More than these, it produces softwood, fluff, and hardwood market pulp. The other service
for the firm include the distribution of other firm’s paper products through the retail services
and provides the customer care support to all the paper products with the distribution of the
adult incontinence products. Commercial, communication and technical papers are also
produced in the firm premium brands such as Cougar, Lynx Opaque Ultra, Husky Opaque
Offset, First Choice, and Sandpiper. This company acquired other business such as health
5. care and personal care in year 2011 and year 2012 so it also has health and personal care
products and services.
Revenues from each (proportion, trends)
The consolidated revenue of the firm for year 2011, according to the financial statement
reported by the firm is USD $ 5612 million which is less than the previous year of revenue.
As seen from the below chart that the market revenue of the firm for the year 2011 got
decrease in comparison to the year 2010 but in year 2010 the revenue of the firm got increase
in comparison to the year 2009.
Revenues in million
dollars (USD)
Financial Trend
6000
5800
5600
Financial
Trend
5400
5200
2009
2010
2011
Fig: Financial trend for the firm for the last 3 years
Revenue is also different for the different business sector but the more revenue is collected
through the pulp and paper business which comprises of 85 % of the total revenue, 14 percent
is collected from the distribution business and from other services it gets almost 1 % of the
total revenue. The below chart describes about the revenue that it generates from the three
type of business mainly of Domtar Corporation.
Revenue per business segment
Pulp and Paper
Distribution
1%
14%
85%
Other
6. Fig: Revenue per business segment for the Domtar Corporation
It is also important for the firm to analyse about the sales from the different region so that it
can be identified that which region is most suitable for the business and where it need to
improve that. The below chart indicates about the sales per region for the products and
services offered by the firm. In USA region the products and services are accepted more than
Canada where it is only 13 percent sales and other region of the world has sales of 12 percent
of the products and services. Based on this it can be said that the sales per region indicate
about the brand recognition of the firm in USA mostly.
Sales Per Region
USA
Canada
Other
12%
13%
75%
Fig: Sales based on the given region for the firm
In which country, how many people are accepting or using the products and services has been
indicated in the below figure. It is generally estimated that in USA there are 63 percent
people who adopt the products and services but in Canada it is 32 percent in other region of
the world there are 5 % people who uses the products and services of the Domtar
Corporation.
Head Count Per Region
USA
Canada
Other
5%
32%
63%
7. Fig: Head Count per region for the products and services of Domtar Corporation
Market share, level of recognition, success measures
The firm has demand and supply for its products and services to the almost every area of the
North America as it is largest industry in North America for paper and pulp products and
services. It is estimated that it almost cover the 80 percent market for the paper and personal
care need. In the other region of the world the firm has acquired the business of around 30-40
percent in the pulp and paper industry. The firm has been recognized as one of the best paper
and pulp production industry in the world. There are total 13 wood fiber mills across North
America and more than 15 manufacturing operations firms across the world. As of 31
December 2011, the Domtar Corporation sold a total of 36131200 shares of the common
stock that are issued by the NASDAQ stock exchange and also the other shares of Domtar
Canada Paper Inc. Which is 100 percent owned subsidiary that is also have a total of 619108
shares as exchangeable shares issued and outstanding.
The exchangeable shares of the other subsidiary organization are considered as the intended
shared to be substantially economically equivalent to the common stocks and these shares are
presently exchangeable at the option of the holder on a one-for-one basis for shares of our
common stock. Therefore, the total number of common and exchangeable shares issued and
outstanding was 36750308 as on 31 December 2011. The common shares of the firm are
traded on the New York Stock Exchange and the Toronto Stock Exchange. The success of the
firm can be measured on basis of the financial strength, employee strength, business
expansion in the overseas countries, customer satisfaction, increase in customer database and
less repay of the debt.
Competitors
There are many competitors of the Domtar Corporation in North America and also across the
world but not on a big scale. Few of them include Boise Cascade Holdings, L.L.C. (privately
held), Georgia-Pacific LLC (privately held) and International Paper Company. The analysis
for the competitors shows that Domtar Corporation’s market capital is more than the other
paper and pulp related businesses. The debt payment has been reduced to a very low so the
earning per share got increase is highest among the same industries in the world in the paper
and pulp. The competitive advantages of the firm are because of the quality, brand
recognition and cheap prices. The competitors are also not able to compete with it because of
8. the large segment of paper, pulp and personal care related production and services because
that has acquired the more than 80 % business in the market.
Industry sector comparison
The paper and pulp industry is very big and most of the businesses are established in the USA
and Europe region. The comparison of the industry can be done as on basis of the price of the
shares because it signifies the importance and the brand of the firm. There are most valuable
79 top global industries in the world, out of them few are such as Mondi plc, Ballarpur
Industries Ltd., International Paper Company, and Orient Paper & Industries Ltd. The paper
and pulp industry share in the global business market is about 5-8 percent and it contributes a
major profit to the GDP of the any country where there is leading paper and pulp industry.
Labour issues related to convergence
Labour issue is one of the biggest issues in the paper and pulp industry because most of the
work is done by the labour as it needs the raw material of wood that is taken from the forest
to the mill and then it converted in to the paper. In case of Domtar Corporation, the issue are
not much because of the good and right policies of the corporate governance of the firm.
Neo-liberalization of media industries
It basically supports the privatization of the state owned enterprises. In this situation it is
important to take care of the labour to work in the private firms erectly. Domtar Corporation
also acquired some state owned business so the labour issues were resolved through giving
them care and welfare policies.
Globalization
In globalization, the main issue is for the labour to involve in the other country or state
culture, language and their business or ethical standards. In these cases the labours feel very
uncomfortable to live the different environment. The proper training and communication
skills make them goo to handle all the situations in the overseas places.
Nationalism
Nationalism culture surely have some labour issue as some of the people don’t want to work
for other state and some of them are not suitable for the work because eof lack of language,
behaviour etc.
9. Technology
Most of the older labors are not aware of the recent technologies so it is very difficult to work
in the new environment. This is the biggest issue among the labour to understand the
technology easily and feel inferiority complex.
Conclusion:
Domtar Corporation is one of the biggest paper and pulp industry, in North America and
second largest in the world. The financial reports states about its growth and brand
recognition among the customers.
References
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