Domtar announces six-month closure in White River

Six months after announcing closure of its Sault Ste. Marie hardwood operation, Domtar Inc. today announced a six-month shut-down of its sawmill in White River.

The temporary closure affects 94 sawmill workers and 101 forestry workers.

The company intends to review the mill's processes and cost structure with an eye to improving productivity, as well as taking "appropriate steps to adjust production to customers needs."

Here in the Sault, Domtar ended up selling its closed hardwood operation to Boniferro Mill Works Inc., headed by Domtar's former local manager, Jim Boniferro. The following is the full text of the company's announcement:

**************************************************************** Domtar to temporarily cease operation at its White River sawmill

MONTREAL, May 23 - Domtar Inc. announced today, it will temporarily cease operations at its White River Sawmill on June 23, 2003.

"Despite good housing starts, an oversupply in the North American market and U.S. duties on softwood lumber exports have created difficult market conditions: notably very low prices.

In this context, our White River operations are unprofitable.

We have therefore decided to close our sawmill for six months.

During this period, we will review the mill's cost structure and processes in order to identify ways to improve productivity, as well as take the appropriate steps to adjust production to customers needs" said Richard Garneau, Senior Vice-President, Forest Products Group.

This temporary closure will affect in total 195 employees of which 94 work at our sawmill and 101 are engaged in forestry operation.

All timberland operations have ceased as of yesterday.

The mill's annual production capacity is 125 million board feet annually or 10% of Domtar's softwood lumber production capacity.

Domtar is the third largest producer of uncoated freesheet paper in North America.

It is also a leading manufacturer of business papers, commercial printing and publication papers, and technical and specialty papers.

Domtar manages according to internationally recognized standards 22 million acres of forestland in Canada and the United States, and produces lumber and other wood products.

Domtar has 12,000 employees across North America.

The Company also has a 50% investment interest in Norampac Inc., the largest Canadian producer of containerboard.

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