Domtar to invest US$30M to repurpose Bennettsville, South Carolina, mill to shift production capacity to specialty and packaging base papers from communication papers--part of previously announced supply agreement with Appleton Papers

Sandy Yang

COLUMBIA, South Carolina , October 25, 2012 (press release) – Domtar Corporation today announced plans to re-purpose its facility in Bennettsville, Marlboro County to align with shifting market demands in the paper industry. The company plans to invest $30 million in the plant over the next year as part of a previously announced long-term supply agreement with Appleton Papers Inc. (“Appleton”) of Appleton, Wisconsin.

The capital project will help re-purpose the facility to allow the mill to shift its production capacity towards the manufacture of specialty and packaging base papers, effectively replacing a significant volume of communication paper making capacity currently manufactured at Marlboro.

“We are excited to expand our Marlboro County operations. This is good news for our 325-plus employees, and it’s good news for the community,” said Bill Edwards, vice-president and mill manager at Domtar’s Marlboro mill. “The conversion of our production capacity is an example of Domtar adapting to meet market demands for the long-term. The Marlboro mill’s cost competitiveness and agility in serving the needs of our customers will allow us to continue being an important part of the economic fabric of Bennettsville, and keep jobs in Marlboro County for many years to come. ”

The Bennettsville facility was previously expanded in 2009 when the company added a steam turbine generator to produce electricity for the plant.

“Today’s announcement is a big win for one of our state’s rural areas. Domtar’s $30 million investment in Bennettsville not only shows the company’s commitment to our state, it also serves as another indication that South Carolina’s business climate is encouraging growth among our existing businesses,” said Gov. Nikki Haley.

The Marlboro County mill has been in operation since 1990 and became a part of Domtar in 2007. The mill has an annual paper production capacity of about 320,000 tons.

“Domtar is a leader in the paper manufacturing industry. This investment solidifies the company’s presence in Marlboro County and will have impact for years to come. It also is another sign of the continued momentum of our manufacturing renaissance,” said Secretary of Commerce Bobby Hitt.

“Marlboro County Council is excited about Domtar’s expansion and would like to thank Domtar’s management for allowing us the opportunity to work together to make this expansion a reality. Marlboro County is working diligently to make our community a great place for industry and this announcement proves it,” said Ken Allen, Marlboro County Council.

“Domtar’s announcement is great news for Marlboro County,” said Representative Elizabeth Munnerlyn. The legislative delegation was happy to play a part in the efforts of state and local government to make this expansion a reality. With team work such as that demonstrated with this project there’s no telling what we can accomplish in the future.”

The Coordinating Council for Economic Development approved a Rural Infrastructure Fund grant for $100,000.

Domtar Corporation (NYSE: UFS) (TSX: UFS) designs, manufactures, markets and distributes a wide variety of fiber-based products including communication papers, specialty and packaging papers and adult incontinence products. The foundation of its business is a network of world class wood fiber converting assets that produce papergrade, fluff and specialty pulps. The majority of its pulp production is consumed internally to manufacture paper and consumer products. Domtar is the largest integrated marketer of uncoated freesheet paper in North America with recognized brands such as Cougar®, Lynx® Opaque Ultra, Husky® Opaque Offset, First Choice® and Domtar EarthChoice®. Domtar is also a leading marketer and producer of a complete line of incontinence care products marketed primarily under the Attends® brand name. Domtar owns and operates ArivaTM, an extensive network of strategically located paper and printing supplies distribution facilities. In 2011, Domtar had sales of US$5.6 billion from nearly 50 countries. The Company employs approximately 9,500 people. To learn more, visit www.domtar.com.

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