Domtar enters into an agreement for the sale of its Lebel-sur-Quévillon, Québec assets

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(NYSE: UFS) (TSX: UFS)

MONTREAL, Jan. 31, 2012 /CNW Telbec/ - Domtar Corporation (NYSE: UFS) (TSX: UFS) today announced that it has signed a definitive agreement with Fortress Global Cellulose Ltd ("Fortress"), and with a subsidiary of the Government of Québec, for the sale of its Lebel-sur-Quévillon assets. The transaction is subject to customary closing conditions and is expected to close in the second quarter of 2012.

"The sale of the Lebel-sur-Quévillon assets to a strategic buyer is a positive outcome for the community and we wish them success for the future," said John D. Williams, President and Chief Executive Officer of Domtar. "The buyer will convert the mill to the manufacture of dissolving pulp and we will support them through this transition by marketing and selling their initial production of paper grade softwood pulp which is contractually limited to a maximum of 100,000 metric tons."

As per the agreement, all pulp and sawmilling assets including the buildings and equipment will be sold to Fortress for the nominal sum of $1.00 and all lands related to the facilities will be sold to a subsidiary of the Government of Québec for the nominal sum of $1.00.

The manufacturing operations at the pulp mill ceased in November 2005 due to unfavorable economic conditions while sawmilling operations at the facility ceased in 2006. At closure, the pulp mill and sawmill directly employed 425 and 140 employees respectively.


About Domtar
Domtar Corporation (NYSE: UFS) (TSX: UFS) is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America and the second largest in the world based on production capacity, and is also a manufacturer of papergrade, fluff and specialty pulp. The Company designs, manufactures, markets and distributes a wide range of business, commercial printing and publishing as well as converting and specialty papers including recognized brands such as Cougar®, Lynx® Opaque Ultra, Husky® Opaque Offset, First Choice® and Domtar EarthChoice® Office Paper, part of a family of environmentally and socially responsible papers. Domtar also produces a complete line of incontinence care products and distributes washcloths marketed primarily under the Attends® brand name. Domtar owns and operates ArivaTM, an extensive network of strategically located paper distribution facilities. The Company employs approximately 8,800 people. To learn more, visit www.domtar.com.

SOURCE DOMTAR CORPORATION

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Pascal Bossé
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Corporate Communications and Investor Relations
Tel.: 514-848-5938

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DOMTAR CORPORATION

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