2007 Global Envelope Alliance Conference

Richard L. Thomas

Senior Vice President, Sales

Domtar Paper Company, LLCJune 4, 2007

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2006 World UFS Demand

8,086,000

3,455,000 380,000

2,306,000

13,416,000

15,693,000

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North American UFS Demand

12,502,000

914,000

4

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

North American UFS Producers

4,873,000

3,997,000

1,439,000

1,086,000

461K 410K 280K 267K 241K 207K 196K669K

Top 5 producers

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U.S. UFS Major End-Use Applications

Business Forms

13%

Envelopes

12%

Direct Mail 9%

Commercial Printing

13%

Magazines 3%

Tablets 3%

Books 4%

Cut Size/Reprographics

42%

Misc Converting 3%

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North American Demand 1990-2006

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

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UFS Demand vs GDP

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North American Production 1990-2006

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

1990199119921993199419951996199719981999200120022003200420052006

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1903Dominion Tar and Chemical Company is formed. The company is founded in England, with a plant in Nova Scotia, Canada. The company produces tar from coke, and manufactures and treats railroad ties.

1914 The company’s headquarters is established in Montreal.

1929 Dominion Tar becomes a public company, with shares traded on the Montreal and Toronto exchanges.

1961 The company acquires Howard Smith Paper Mills, Canada’s largest paper manufacturer, as well as St. Lawrence Paper.

1965 Dominion Tar changes its name to Domtar Ltd, to reflect the more diverse nature of its businesses.

1973 Domtar acquires Bunton Reid, entering the distribution business

2001 Domtar purchases the bulk of Georgia Pacific’s paper production facilities, including the world class Ashdown, Arkansas facility.

2007Domtar merges its assets with the paper operations of Weyerhaeuser, to form North America’s largest uncoated freesheet producer. Domtar sells its interest in the Norampac linerboard joint venture, becoming a “pure play” bleached pulp and paper producer.

History

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The “New Domtar” Profile

Employees 14,000 Worldwide

Sales $ 6.7 Billion

Locations Head Office – Montreal, Quebec

Operations Center – Fort Mill, South Carolina

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The “New Domtar” - Papers and Pulp

Largest UFS producer in North America Fifteen pulp and paper mills and one single market pulp mill

5.2mm tons of capacity (uncoated and coated)

32 paper machines

16 Converting facilities

1.3mm tons of market pulp

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Leading position in major segments

Grades of PaperDomtarRank

Cut size 1 Offset 1Opaque 1Forms 1LW Coated

(mechanical/groundwood) 7

Colors & ITB 3LW Uncoated 1Trade book 1Coated Bristol 4TCW 3Envelope 2Technology Imaging 2

Number One position in 6 of top 8 grades

Source: Domtar volume and share estimates

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Domtar:Sustainable Business

Practices

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Past Customers satisfied with green product promise Original efforts focused on recycling and pollution reduction Basic compliance with regulations was acceptable Sustainability was a fringe concept

Present Customer expectations are higher – they want proof

Certification

Transparent communication required (sustainability report, web)

Current efforts focus on total environmental impact Companies expected to go above and beyond basic compliance Sustainability on top of corporate agendas

Sustainability Trends

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Customers are more aware:

92% state it is more important for companies to be socially responsible

85% state that the company’s degree of social commitment is an important factor in the buying decision

90% state that they might switch brands if they discovered that a company followed negative citizenship practices

Sustainability Trends

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Hurricane Katrina

“An Inconvenient Truth”

Energy Prices

Sustainability Trends

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Forest Certification Development

American Tree Farm System created in 1941 Originated idea of certifying and advertising a well-managed forest

Forest Stewardship Council (FSC) founded in 1993 Developed to prevent forest deterioration globally

Sustainable Forestry Initiative® (SFI) founded in 1994 Created in U.S. to address public concerns about forest

sustainability

Canadian Standards Association (CSA) program developed in 1996 SFI recognizes CSA as a functionally equivalent program

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Forest Certification Development

Forest certification has gained wide acceptance in the past decade.

There are now approximately 385 million tons of certified forestlands in North America, up from nearly none in the early 1990s.

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Domtar and Certification

Domtar has achieved ISO 14001 environmental certification for its forestry management practices in all forestland liscensed or owned by the company.

All mills and converting facilities are either ISO 14001 certified or certifiable.

All mills and converting facilities are third-party certified to the standards of either CSA (Canadian Standards Association), FSC (Forest Stewardship Council) or SFI® (Sustainable Forestry Initiative)

Domtar has earned the support of well-respected environmental organizations, including Rainforest Alliance, WWF and ForestEthics.

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"Wood is a crop. Forestry is tree farming.

-Gofford Pinchot, First chief of the USDA Forest Services

Tree Farming

The term "tree farming" was first used in the 1940s to introduce the public to sustainable forestry terminology in words they could easily understand

Farming implies continual stewardship and production of goods year after year  

Source: American Tree Farm System

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The forest products industry plants 1.7 million trees per day, exceeding the number harvested

In the nation’s commercial forests, net annual growth exceeds harvests and losses to insects and disease by 49% annually

Tree Farming