Domtar Permanently Cutting Paper Capacity, Jobs

July 31, 2007 - Domtar said that it will permanently close its mill in Gatineau, Quebec as well as its converting center in Ottawa, Ontario. Domtar is also permanently closing two paper machines, one located at its Woodland mill located in Baileyville, Maine and another at its Port Edwards, Wisconsin mill.

About 430 jobs will be affected by the decision, the company said.

"Today's announcement is an important step in our review of our overall production capacity. The driving forces behind this decision to permanently close these operations are excess capacity and cost competitiveness," said Raymond Royer, Domtar's president and CEO.

"While we are in the process of leveraging our improved geographic footprint to serve our customers from our best performing operations, adjusting our production to demand remains an ongoing exercise. Further rationalization may be implemented in the near future," Royer added.

The Gatineau mill has an annual production capacity of 125,000 tons of coated and uncoated paper. The mill and the Ottawa converting center together employ approximately 250 people. These facilities are expected to cease their operations by October 27, 2007.

The Woodland paper machine has a yearly production capacity of 125,000 tons of uncoated paper. The immediate permanent closure of this machine and its supporting sheeter will reduce the mill's workforce by approximately 150 jobs.

The Port Edwards #5 paper machine has an annual capacity of 34,000 tons of uncoated paper. Its immediate permanent closure will reduce the mill's workforce by approximately 30 jobs.

In total, these closures will eliminate approximately 284,000 tons of Domtar's annual production capacity and reduce its total workforce by approximately 430 people.

SOURCE: Domtar Corp.

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