Domtar to reduce paper making capacity



    TICKER SYMBOL
    UFS (NYSE, TSX)

    MONTREAL, Dec. 13 /CNW Telbec/ - Domtar announced today that it will
close its Port Edwards, Wisconsin mill as well as reorganize production at its
Dryden, Ontario facility. These measures will result in a permanent reduction
of Domtar's annual production capacity by approximately 342,000 tons.
    The Port Edwards, Wisconsin mill, which produces uncoated freesheet
paper, has an annual production capacity of 165,000 tons. Operations are
expected to cease in the second quarter of 2008. Approximately 500 employees
will be affected by this closure. Most product lines will be gradually
transferred to more efficient facilities.
    The Dryden, Ontario mill, which produces uncoated freesheet paper, will
undergo a reorganization of its operations. Paper machine No.2, which has a
production capacity of 332,000 tons, as well as two cutsize sheeters, will
close on December 22, 2007. Paper machine No.1, which has a production
capacity of 155,000 tons, will be restarted in mid-January 2008. This will
result in a net permanent reduction of annual production capacity
by 177,000 tons. Approximately 125 employees will be affected by this
reorganization.
    "We need to pursue the consolidation of our production capacity to
improve our competitiveness in the North American market, given continued
unfavorable economic conditions and a softening of demand for fine papers,"
said Mr. Raymond Royer, President and Chief Executive Officer of Domtar. "In
spite of years of sustained efforts from our dedicated employees as well as
from the company, high costs posed significant challenges to these facilities.
These measures were necessary to make Domtar an even stronger company. They
also reflect our commitment to our customers and stakeholders to be the most
efficient producer in North America," added Mr. Royer.
    In total, approximately 625 employees at these facilities will be
affected by these decisions. In accordance with its values and policies,
Domtar will take appropriate measures to assist affected employees.

    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, (514) 848-5103; Pascal
Bossé, (514) 848-5938

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Domtar Corporation

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