Postal Service Uncertainty Hurting Paper Industry, Domtar Says

Domtar Corp. (UFS), the largest North American maker of paper for printers and copiers, is among companies hurt by uncertainty about the future of the U.S. Postal Service, which may run out of money in September, an executive said.

Domtar may see less of its printed paper sent as advertising mail if mailers don’t know what sort of future the Postal Service has, Rob Melton, vice president of converting papers and strategic accounts, said today in Washington. The company has shut down paper machines at four mills since 2007.

“Uncertainty about the viability of the Postal Service will negatively impact mailer and marketer decisions to choose mail, so the urgency to restore confidence that the Postal Service is a dependable partner is great,” Melton, whose company is based in Montreal, today told the House Subcommittee on Federal Workforce, U.S. Postal Service and Labor Policy.

The Postal Service, which this week posted a loss of $2.6 billion for its fiscal second quarter, is asking Congress to allow it to delay a required $5.5 billion payment for health benefits of future retirees. That payment is due in September.

The service is also seeking permission to more easily close post offices and other facilities.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net.

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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