Domtar to close one pulp machine at Kamloops, British Columbia pulp facility

TICKER SYMBOL

(NYSE: UFS) (TSX: UFS)

MONTREAL, Dec. 13, 2012 /PRNewswire/ – Domtar Corporation (NYSE: UFS)
(TSX: UFS) announced today that it will permanently shut down one pulp
machine at its Kamloops, British Columbia facility.  This decision will
result in a permanent curtailment of Domtar’s annual pulp production by
approximately 120,000 air-dried metric tons of sawdust softwood pulp
and will affect approximately 125 employees.

The pulp machine, known at the mill as the “A-Line” is expected to be
closed by the end of March 2013.

“Prevailing economic conditions in the global pulp markets and the
deteriorated competitiveness of this small pulp manufacturing line, coupled with unforeseen boiler repair costs, have forced us to
rationalize this pulp production capacity.  We will focus our energy
and resources on optimizing the larger, more competitive, ‘B’ pulp
manufacturing line which will continue to operate,” said Mike Edwards, Senior Vice-President, Pulp and Paper
Manufacturing. “Employees affected by this change have earned our appreciation and we
thank them for their contributions to the Kamloops Mill.”

The Kamloops pulp operation will continue to operate its remaining pulp
manufacturing line with an annual capacity of approximately 350,000
air-dried metric tons of softwood kraft pulp and employ approximately
300 people.

Domtar will take appropriate measures to assist employees affected by
this decision in accordance   with the collective agreement, Domtar
policy and legislation.

About Domtar

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 Ariva(®), 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
9,300 people. To learn more, visit www.domtar.com.

Forward-Looking Statements

All statements in this press release that are not based on historical
fact are “forward-looking statements.” While management has based any
forward-looking statements contained herein on its current
expectations, the information on which such expectations were based may
change. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
risks, uncertainties, and other factors, many of which are outside of
our control that could cause actual results to materially differ from
such statements. Such risks, uncertainties, and other factors include,
but are not necessarily limited to, those set forth under the captions
“Forward-Looking Statements” and “Risk Factors” of the latest Annual
Report on Form 10-K filed with the SEC as updated by the Company’s
latest Quarterly Report on Form 10-Q. Unless specifically required by
law, we assume no obligation to update or revise these forward-looking
statements to reflect new events or circumstances.

SOURCE DOMTAR CORPORATION