Domtar Corp. CEO John Williams speaks to Brittaney Kiefer about industry challenges and plans for expanding into the personal care market.
What are your current priorities and how are you working to diversify your business as paper usage declines?
Paper is a good indicator of economic activity and white-collar employment. I came in as CEO in the teeth of the recession in January 2009 and fourth quarter 2008 had been just horrible - a massive downtime in our business. Our share price had completely collapsed. My steady-the-ship priorities were to motivate our people and, just as important, motivate the customer.
Since then, we've paid nearly all of our debt and become financially secure. We have an ambitious approach to building our personal care business while the core paper business declines, with a goal of increasing it to between $300 million and $500 million of EBITDA (earnings before interest, taxes, depreciation, and amortization) over the next five years. We bought three businesses in the adult incontinence space [Domtar acquired Attends, Attends Europe, and EAM, a pulp and fiber technology company.]
The key priority is to build that personal care business while also maintaining our market leadership and sustainable position and making sure we are motivating new employees to do their best for us.
Paper still has its place, but we're all aware of the digital revolution, and there are uses paper had that it no longer has. A 3% to 4% decline is a pretty good estimate for the next few years, but it may slow if employment comes back.
Talk about Domtar's focus on sustainability - the paper industry is often viewed as being destructive to the environment.
Our industry has had a reputation of being a pillager of the land. That is highly undeserved, but it is one that is out there.
We have branded the company sustainable and differentiate ourselves that way. You have got to live by these sustainability beliefs and make certain the whole organization lives by them.
If you see sustainability as putting lipstick on the pig, you are going to get what you deserve. It's about aligning behavior and having a good story to tell.
We have a brand called EarthChoice, which has been a proxy for forestry-certified paper. Paper is a sustainable, renewable crop. You have to be careful because a lot of this land is precious land, and how you manage that should be done respectfully for all users. If it is both good business and environmentally sound, why not do it?
We set up a proper community donations system to make certain we give back where we can. We're also involved with the organization Recyclebank to help educate consumers about end-of-life paper recycling.
Why and how does Domtar get involved with local communities?
Local communities are huge for us because typically a paper or pulp mill will be the largest employer in a remote or small town. How we interact with that local community, where we often are the tax base, is vital to us. People have to see us there. For example, we sponsor the local orchestra in Montreal and partner with local United Way chapters in every community we are in. We also have EarthChoice ambassadors, a network of employee volunteers who help in their own communities and participate in different environmental initiatives.
A group volunteered at Andrew Jackson State Park in South Carolina, and they have helped clean out various lakes and build park benches in cooperation with student associations. We're not paying anyone to do this, which is a sure sign that people are very focused.
What are your communications priorities for the coming year?
The EarthChoice brand continues to be a priority. There's still a lot of work to be done in positioning it and figuring out how to get more Forest Stewardship Council-certified wood in the paper, for example.
We launched the Paper Because campaign (pictured below) to talk about the appropriate use of paper. There are some short films on Paperbecause.com that are amusing vignettes of how people use paper.
We don't spend a lot of advertising and promotional dollars in the way a consumer company does, but the campaign has really motivated our customers. We learned how to calibrate that message to them. Now, we can deliver it to the consumer as we move into that space and co-market it with Office Depot. It is an evolution, so you will see more of that from us in the future.
Our key constituents are the people who work for us. I write a blog to engage them, and we have a great internal website that is available to everybody, as well as newsletters and quarterly reviews.
At Domtar, we try to run an environment where everyone knows they have their part to play and where we let people know we value them and their contribution. A lot of that is how my peers and I interact with employees every day.