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Domtar Closes Sale of Text, Cover, Writing Papers Business

April 22, 2008 - Domtar Corp. today said that it has closed the sale of its text, cover and writing product line of papers to SMART Papers of Hamilton, Ohio.

"This is the result of an effort to support our customers through the streamlining of our manufacturing system by selling brands isolated within Domtar's paper product offering. With this transaction we will continue to reinforce our focus as the North American market leader in the areas of commercial printing, business and office, as well as converting and other specialty papers," said Raymond Royer, president and CEO of Domtar.

"This focus will be important as we continue to grapple with tough market conditions," Royer said. "Recent escalating energy prices are translating into rapidly rising costs for raw materials. Besides the impact on direct energy consumption, we are also facing significant inflation pressures for fiber, chemicals and freight, which represent more than half of our pulp and paper manufacturing delivered costs."

Domtar estimates that inflation pressures will increase these costs in the first quarter of 2008 by $35 to $45 million compared to the fourth quarter of 2007.

SOURCE: Domtar Corp.




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