Domtar Corp. is getting out of the coated groundwood paper business and will sell its product lines to Ohio NewPage Corp. of Ohio, the companies said Tuesday.
Domtar, based in Montreal, also said it will close its Columbus, Miss., paper mill, which employs 219 people, by the end of April.
The company said that the market for coated groundwood paper is challenging, and the Mississippi mill suffered from a weak cost position despite efforts by employees.
Coated groundwood paper is higher-quality paper used in the printing of magazines, catalogs and direct mail inserts.
NewPage, headquartered in Miamisburg, Ohio, near Dayton, will take over Domtar's book of business, its brands and the coated groundwood inventory remaining at the Mississippi mill after it closes.
No purchase price was disclosed for the transaction, which is to be completed in April.
