Domtar to Shut Port Edwards Mill, Rework Dryden Mill

December 13, 2007 – Domtar today said that it will close its Port Edwards, Wisconsin mill, which has a capacity to produce 165,000 tons per year of uncoated freesheet (UFS) paper, affecting some 500 employees.

The mill's operation is expected to cease in the second quarter of 2008, Domtar said.

In addition to Port Edwards, Domtar said it will reorganize UFS production at its Dryden, Ontario facility. Paper machine #2, which has a production capacity of 332,000 tons, as well as two cutsize sheeters, will close on December 22, 2007. Paper machine #1, which has a production capacity of 155,000 tons, will be restarted in mid-January 2008.

The measures at Dryden will result in a net permanent reduction of annual production capacity by 177,000 tons, and about 125 employees will be affected.

In total, Domtar’s annual production capacity of UFS will be permanently reduced by approximately 342,000 tons.

Most product lines will be gradually transferred to more efficient facilities, Domtar said.

“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 Raymond Royer, Domtar's president and CEO. "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," Royer added..

Domtar said it will work to provide assistance to employees who will be affected by the closures.

SOURCE: Domtar Corp.

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