Montreal, Quebec, Canada, 16 March 2010 -- /PRNewswire/ -- Domtar Corporation (NYSE/TSX: UFS) announced today that it will permanently close its coated groundwood paper mill in Columbus, Mississippi, USA. The Domtar coated groundwood paper mill has an annual production capacity of 238,000 tons of coated groundwood and 70,000 metric tons of thermomechanical pulp. The mill currently has 219 employees. Operations are expected to cease by the end of April 2010.

"Market conditions for coated groundwood paper are challenging and despite the best efforts of our employees -- and these efforts have been commendable -- the mill continues to suffer from a weak cost position," said John D. Williams, president and chief executive officer of Domtar. "With this permanent closure, Domtar is exiting the coated groundwood paper business."

Domtar also announced the sale of its Choctaw, Saturn, and Jupiter coated groundwood product lines and trademarks to NewPage Corporation. The sale to NewPage also includes the mill's paper inventory and book of business. Domtar intends to dismantle and dispose of remaining assets as deemed appropriate.

Domtar will take measures to assist employees affected by these decisions in accordance with its policies.

Corporation (NYSE/TSX:UFS) is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America and the second largest in the world based on production capacity, and is also a manufacturer of papergrade, fluff, and specialty pulp. The company designs, manufactures, markets, and distributes a wide range of business, commercial printing and publishing, converting, and specialty papers. Domtar owns and operates Domtar Distribution Group, an extensive network of strategically located paper distribution facilities. Domtar also produces lumber and other specialty and industrial wood products. The company employs more than 10,000 people. To learn more, visit www.domtar.com.