Domtar to Participate in the Biomass-Fueled Power Plant Project in Wisconsin

June 20, 2011 (Press Release) - Domtar Corporation today announced that its Board of Directors has authorized the signing by Domtar Paper Company, LLC (a wholly-owned subsidiary of Domtar) of the revised project agreements with Wisconsin Electric Power Company ("We Energies") to participate in the project that will see We Energies construct a biomass-fueled power plant at Domtar's Rothschild, Wisconsin paper mill site. The revised project agreements have been agreed to by the parties and reflect the order points contained in the Certificate of Authority issued on May 12, 2011 by the Wisconsin Public Service Commission ("PSC"). Under the timeline set out by the PSC, We Energies must submit a compliance filing within a 45-day period from the date of the Certificate of Authority, indicating that the order points have been addressed.

"This project is an innovative way to improve our mill's competitiveness and environmental performance while providing more green power to the State of Wisconsin," said John D. Williams, President and Chief Executive Officer of Domtar. "Wood is a renewable resource that can be used for producing pulp, paper, and electricity, and we are proud to leverage our expertise in sustainable fiber procurement."

The project is expected to create approximately 400 construction jobs and 150 permanent jobs in the surrounding community, including jobs for independent wood suppliers and haulers. Wood, waste wood and sawdust will be used to produce 50 megawatts of green electricity for the grid and to support Domtar's papermaking operations in Rothschild under a steam supply agreement. The project will result in a highly efficient use of bio-mass resources and Domtar mill's infrastructure while allowing Domtar to retire less efficient boilers, virtually eliminating its use of fossil fuels at the mill. The construction is expected to take 30 months for a start-up by the end of the third quarter of 2013.

Domtar Corporation is approximately 75% energy self-sufficient across its North American manufacturing footprint of 13 pulp and paper mills. The average Domtar pulp and paper facility draws approximately 87% of its thermal energy (energy required to make steam) from renewable fuels such as biomass and spent cooking liquor.

SOURCE: Domtar Corp.