Domtar and Conifex agree to terminate deal



    TICKER SYMBOL
    UFS (NYSE, TSX)

    MONTREAL, Jan. 7 /CNW Telbec/ - Domtar Corporation announced today that
its wholly-owned subsidiary, Domtar Inc., and Conifex Inc. have terminated the
agreement announced June 22, 2007, relating to the sale of Domtar Inc.'s
forest products business.
    Conifex was to acquire sawmills and other forest operations situated in
Ontario and Québec. Both parties recognized that closing conditions had not
been met pursuant to the terms of the agreement.
    Domtar will continue to seek opportunities to maximize the value of these
assets as well as pursue initiatives to improve their operational efficiency.

    Domtar Corporation (NYSE/TSX: UFS) is the largest integrated producer 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 pulp.
The Company designs, manufactures, markets and distributes a wide range of
business, commercial printing, publication as well as technical and specialty
papers with recognized brands such as First Choice(R), Domtar Microprint(R),
Windsor Offset(R), Cougar(R) as well as its full line of environmentally and
socially responsible papers, Domtar EarthChoice(R). Domtar owns and operates
Domtar Distribution Group, an extensive network of strategically located paper
distribution facilities. Domtar also produces lumber and other specialty and
industrial wood products. The Company employs nearly 14,000 people. To learn
more, visit www.domtar.com

    All statements in this press release that are not based on historical
fact are "forward-looking statements". While management has based any
forward-looking statements contained herein on its current expectations, the
information on which such expectations were based may change. These
forward-looking statements rely on a number of assumptions concerning future
events and are subject to a number of risks, uncertainties, and other factors,
many of which are outside of our control that could cause actual results to
materially differ from such statements. Such risks, uncertainties, and other
factors include, but are not necessarily limited to, those set forth under the
captions "Forward-Looking Statements" and "Risk Factors" of the prospectuses
contained in the registration statement on Form S-4 filed with the SEC. We
disclaim any intention to, and undertake no obligation to, update or revise
any forward-looking statements contained in this press release.




For further information:

For further information: Michel A. Rathier, Media Relations, (514)
848-5103; Pascal Bossé, Investor Relations, (514) 848-5938

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Domtar Corporation

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DOMTAR INC.

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