avatar Domtar Paper Company, LLC Manufacturing
  • Location: South Carolina 
  • Founded:
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    A Conversation with Leaders Let’s talk opportunities and challenges Paper in Our Lives Paper communicates, paper is practical and paper is sustainable Listening to the People Building sustainable relationships Meeting Customer Needs Mills, converting and distribution operations that are unmatched PAPER IS HERE TO stay DOMTAR 2008 ANNUAL REVIEW


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    As North America’s largest integrated manufacturer and marketer of fine paper and a recognized leader in environmentally sustainable practices, we believe our customers deserve even more. At Domtar we strive to do everything — from the forest floor to your front door — to earn your confidence and your business through the offering of superior quality products, dedicated service and continuous innovation. If you’re looking for distinct paper solutions for your printing, publishing or business communications, look to Domtar to answer your every need. The Mark of Responsible Forestry SW-COC-002844 © 1996 Forest Stewardship Council A.C. For more information about Domtar, visit us at www.domtar.com


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    to the Earth by Cougar ®


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    TABLE OF P.6 P.4 PAPER Letter to the Editor IS HERE TO PICTURED on the coVeR: William Sharp Business Analyst, finance on the BAck coVeR: Shawn Freeman senior Analyst, it Asset Management on PAGe 4: Marissa Caron Advisor, investor Relations on PAGe 63: Bettie Fleming executive secretary, Marlboro Mill, sc A Conversation MESSAGE TO STAKEHOLDERS with Leaders 2008 GRAPHIC DESIGN ANNUAL REVIEW CONTRIBUTORS AND PRINT PRODUCTION Michel A. RATHIER Pascal BOSSÉ ARdoise desiGn Editor-in-Chief Guy BOUCHER coMMunicAtions Véronique BOUFFARD Montreal, Qc, cAnAdA PRODUCTION NOTES Mary Jean CASHMAN Paper: Marie CHAMBERLAND dAiley & Associates, cover printed on fsc-certified 65 lb. cougar cover, smooth finish. Dominique CUMMINGS West hollyWood, cA text printed on fsc-certified 70 lb. Michel DAGENAIS cougar text, smooth finish. Richard DESCARRIES PHOTOGRAPHY Printing: Printed with uV ink throughout on Nicholas ESTRELA an 8-color heidelberg speedmaster Xl Pierre chARBonneAu Meredith LAUCKNER 105 with full inter-deck and end-of-press Pierre cReVieR uV drying systems. Michel MARCOUILLER Printing techniques: Chantal NEPVEU inside cover and page 1: Bart NICHOLSON PRINTING Printed out of four-color process with spot Raised uV Varnish and Lee O’leARy a dot-for-dot dull varnish. AndeRson lithograph Mélanie PAillé Page 30-31: los Angeles, cA Printed out of four-color process Bérangère PARRy with spot Raised Glitter uV Varnish and a dot-for-dot dull varnish. norm Ritchie Page 35: lyla RAdMAnoVich Printed out of four-color process with a spot Raised sandpaper uV Varnish Peter Ross and a dot-for-dot dull varnish. Razvan theodoRu The material contained in this Annual Brian WesteR Review is provided for information kathy Wholley purposes only, and should not be interpreted as constituting soliciting material in connection FEATURES with our 2009 Annual Stockholders Meeting. All relevant information 10 Letter to the Editor from with respect to our 2009 Annual dr. derrick de kerckhove Stockholders Meeting may be found Cert. no. SW-COC-002844 Professor at the university in our 2009 Proxy Statement and of toronto 2008 Annual Report on Form 10-K.


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    CONTENTS 12 14 38 48 The Domtar Paper in A People Meeting Universe Our Lives Business Customer NORTH AMERICA’S LARGEST WHATEVER THE EVOLVING DOMTAR VIEWS ALL ITS Needs INTEGRATED MANUFACTURER USES OF PAPER MAY BE, EMPLOYEES AS A SOURCE A MIX OF ASSETS THAT OF UNCOATED FREESHEET ONE THING REMAINS — OF INVALUABLE KNOWLEDGE OFFER A BROAD PRODUCT PAPER PAPER HAS BEEN, AND LINE TO MEET A VARIETY OF ALWAYS WILL BE, PART 38 OH&S – Smart People = CUSTOMER REQUIREMENTS 12 2008 financial OF OUR LIVES. Safe People highlights 40 Listening to the 64 Tailoring Paper, 18 Paper with a Conscience People Just Right. 20 Paper We Can 42 Building Sustainable Transforming newly- Depend On Relationships minted raw materials 24 Premium Printing into finished products 29 Going Digital 32 Publishing Papers 66 Distribution 33 Converting and Made to Deliver! Specialty Knitting close ties with customers 36 Not Pulp Fiction 37 Knock on Wood 44 SuStAiNABiLity – 68 A HiGH StANDARD 70 CONtACt A QueStiON OF BALANCe OF GOVeRNANCe iNFORMAtiON


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    Paper has been among LETTER TO THE EDITOR civilization’s principal supports for communication. It takes an infinity of forms, some as humble as a tossed coffee cup while others forever remain sacred in the libraries, churches and galleries of the world. PAPER IS HERE TO


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 5 forever paper By Dr. Derrick de Kerckhove* Professor at the university of toronto Since the use of papyrus in ancient egypt, A lot of people prefer to pay bills on-line, but many still want to see them on paper. Photocopying paper has been among civilization’s principal is here to stay. there is still and there will always be a huge advantage of paper over screen for supports for communication and today it is strictly reading material. With words on paper, we remain in control. We decide what to read and ever-present in our lives. when, and how to interpret the information. On a screen, you have to share the control and the responsibility with a machine. Paper takes an infinity of forms, some as humble as a tossed coffee cup or a simple invoice, while if electronic information is that of “real time”, printed information is that of long time. At the uS others forever remain sacred in the libraries, Library of Congress, we will find that their best electronic recording device cannot guarantee electronic archives for more than 110 years. After that they begin to degrade. churches or galleries of the world. is paper under attack? yes. Critics have long been lamenting the fact that trees have to meet an in one day, we can run into dozens of different untimely death to publish a book. And the argument against using paper continues to rage. the experiences with paper, from the personal, such as industry is doing its best to respond positively and responsibly to this challenge, which can only a love letter, to the official, like a parking ticket! deepen as the environment settles as a top priority of the economy and for all of society. Not all paper is used to support information, but What is needed is a vision: to recognize the unique properties of paper and see where they best fit much of it is. this is the rub. information, according a need within the electronic environment. innovation is invited. in fact, the union between print to many observers, is fast becoming electrons, and electrons has already begun. in the field of information distribution, the electrons are taking on-line, in databanks, in electronic transactions command, not yet in numbers but in the variety of necessary services they offer at low costs for very and, usually, on screen. specific usages of just-in-time information. the numbers are still on the paper side but the margin information is at the meeting point between two and the aura of electronic communications will continue to nibble at the market. the key will be to worlds, that of words and images fixed on paper, bring about a paradigm change where it will not be paper or electrons but paper and electrons. and that of words and images flying across a in fact, there are already direct links being cre- screen. this piece was written on a screen. it was ated between printed media and the internet. sent on-line to the publisher but, ultimately, the By inserting bar codes in the margins of their information is at the reader will see it on paper. thanks to this method, catalogs, some european retailers allow con- meeting point between this will all happen a lot faster than it would have sumers to access additional information on back when teachers handed out roneo-typed class key products using their mobile phone or other two worlds, that of notes to their students. Many of us remember handheld device. this technology is also being words and images how copies once required a fragile and messy used in some magazines, mainly to complement fixed on paper, and sheet of ink to be made. advertising, and a project is in the works to apply Computer networks, screens and now smartphones it to books. in the latter case, the reader will that of words and access either a bar code implanted on the page are bringing enormous benefits to everybody, images flying across a by the publisher or apply their own bar codes accelerating the processing of information far and fill them with information they download screen. this piece was beyond the speed of paper, allowing people to themselves via their phone. A symbiotic relation- share information in ways never tried before, on written on a screen but, ship between paper and the electronic universe a global scale. So does that mean that the era of if ever there was one! ultimately, the reader paper is over? Of course not. the point is, there is practically always a com- will see it on paper. Not all information processing will abandon paper plementary relationship between paper and for electrons. Signs and statistics are pointing to a electronic media when dealing with human *Dr. Derrick de Kerckhove is a Full Professor in the decline, but not the elimination of paper usage in affairs. And that will probably always be the Department of French at the university of toronto, cross-appointed at the Faculty of information specific areas, say ticketing an airplane boarding case. instead of fearing electrons as the enemy Studies and the Knowledge Media Design institute. pass, but not a badly parked car. But even that is from without, let the industry see electronics as He is a former director of the McLuhan Program in Culture & technology and was awarded the not a complete substitution, as many print their the perfect complement to the unique uses and Papamarkou Chair in technology and education on-line reservation voucher to accelerate their qualities of paper. at the Library of Congress in Washington. boarding procedures.


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    Talking opportunities and challenges JOHN D. WILLIAMS PRESIDENT AND CHIEF EXECUTIVE OFFICER (effective January 1, 2009) tHe BeGiNNiNG OF 2009 SAW tHe LeADeRSHiP OF iNTeRVieWeR: Raymond, you’ve witnessed a lot for our industry, i think 2008 will be remembered DOMtAR CORPORAtiON PASS tO JOHN D. WiLLiAMS, of change in the North American pulp and paper primarily for the severe rise in input costs, capacity A LeADeR WitH OVeR 30 yeARS OF eXPeRieNCe iN industry over the last 12 years. Looking back, how rationalization and mill closures. in domtar’s core BOtH tHe CONSuMeR PRODuCtS AND PACKAGiNG would you characterize 2008? business of uncoated freesheet paper, it was the iNDuStRy. JOHN WiLLiAMS AND RAyMOND ROyeR, second year in a row that demand declined by 6% WHO WAS tHe COMPANy’s PResident And ceo RR: 2008 stands out as a year of unprecedented or more in north America. foR oVeR A decAde, Recently sAt doWn to challenges. the slump in the housing market, AnsWeR Questions ABout the PAst yeAR And the financial crisis spreading to the “main street” JDW: i would also add that 2008 was a year of discuss the outlook foR doMtAR And the economy and the collapse of markets around the contrasts. in the first six months, domtar dealt noRth AMeRicAn PulP And PAPeR sectoR. world created one of the most difficult economic with accelerating inflation for materials, energy environments we’ve seen in a long time. and freight. yet we were still able to maintain and even expand profit margins because of higher paper prices and only a moderate decline in demand.


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 7 RAYMOND ROYER FORMER PRESIDENT AND CHIEF EXECUTIVE OFFICER (from 1996 to 2008) a conversation with stakeholders Message to leaders in the second half of the year, Domtar continued to get very little relief in terms of input costs. And iNTeRVieWeR: Taking these market conditions into consideration, how would you say Domtar fared? “I think this dramatic quite suddenly, pulp prices started to fall sharply decline over a short and paper demand rapidly deteriorated. i think RR: All things considered, our financial perfor- period of time, which this dramatic decline over a short period of time, mance was good. Domtar was profitable with which goes far beyond the historical 2% per year earnings before items of $88 million ($0.17 per goes far beyond the trend, is mostly cyclical and can be attributed share) compared to $131 million ($0.25 per share) historical 2% per year to the current recession environment in the u.S. in 2007. everything is being affected by the economic trend, is mostly cyclical downturn, so it’s only logical that demand for including $96 million of early contributions and can be attributed fine paper will be as well. to pension trust funds made in the fourth quarter, cash flow from operations amounted to the current recession to $197 million and free cash flow amounted to environment in the U.S.” $34 million in 2008. John D. Williams


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    We also paid down our long-term debt by JDW: Although i’ve only been at the helm since $102 million during the year. And, while global January 1, 2009, my due diligence began in the fall financial credit conditions were deteriorating, of 2008 and i have learned a lot about Domtar—its credit agencies upgraded our rating. strong points as well as its weaknesses. From the outset, i have worked closely with the Board JDW: it’s clear to me that Domtar has increased and the Management Committee to evaluate its financial flexibility thanks to decisions made every aspect of the organization: our different early in 2008, namely focusing on cash generation, businesses, our asset base, market dynamics capital discipline and debt reduction. and so on. My objective out of the gate is to right-size the company to make the most of our RR: And our synergy realizations certainly helped. strong foundations. i’m particularly proud of this accomplishment. When we closed the transaction that created INTERVIEWER: What led you to accept the job of Domtar Corporation back in March 2007, we gave President and CEO? ourselves two years to achieve synergies with an initial target of $200 million by March 2009. in JDW: From a professional contribution standpoint, the end, we delivered over $250 million within my goal is to create value through my efforts and less than two years. i think you’ll agree that this commitment to a job well done. With Domtar, i saw has played a crucial role in Domtar’s ability to the right balance of challenges and opportunities strengthen its balance sheet. and i also believe i can benefit the company. JDW: yes, Domtar achieved a lot in the last year, Past experience has shown that my strengths lie not the least of which was improving its safety in evaluating and extracting the most out of an performance by 15% in 2008. the number of lost asset base, understanding consumer and end-user workdays also went down by 13%, which suggests behaviors, integrating cultures and ultimately a reduction in the severity of accidents. employees building the right strategic vision. Over the years, are extremely vigilant and, if we are to remain a i have cultivated a customer-oriented market leading organization in our market, we need to view, working on the back-end of the supply- continue to support them by providing a secure chain through cost effectiveness and efficiency. working environment. i’ve also developed a keen understanding of consumer behavior and diversification through INTERVIEWER: John, as Domtar’s new President service, product development (the “D” in R&D) and Chief Executive Officer, what are your immediate and innovation. priorities? RR: the skills you bring to the job will certainly “It’s clear to me that serve Domtar well as the company strives to reach the next level of success. And, i think you’ll agree Domtar has increased that there are some real opportunities and that its financial flexibility Domtar has great building blocks with which to thanks to decisions leverage these opportunities. made early in 2008, JDW: i completely agree. We have highly efficient namely focusing world-class assets, a motivated and skilled workforce eager to contribute to preserving on cash generation, Domtar’s low cost position in the industry, and capital discipline and a solid market position. the Domtar story rests on a strong base, and by quickly executing on debt reduction.” the necessary changes we can make it a truly John D. Williams compelling story going forward.


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 9 “The Domtar story rests Financially, Domtar’s priority will remain on cash flow generation with an immediate focus on a strong base, and on reducing discretionary spending, reducing by quickly executing procurement costs, inventory control and the monetization of assets. Keeping a strong balance on the necessary sheet is crucial. changes we can make it We’ve got a lot on our plate this year and the key a truly compelling story to winning in this difficult environment will lie in going forward.” our proven ability to evolve with the times. John D. Williams RR: Domtar is certainly no longer the company i began working for 12 years ago. this team iNTeRVieWeR: John, what is your mandate from has demonstrated that it can adapt to new the Board of Directors? circumstances and grasp opportunities when they come our way. JDW: My mandate is to lead the development and execution of a new strategic plan for Domtar in JDW: And there are still opportunities to be had 2009 and onward. even in a context where our North American uncoated freesheet market is mature and declining. As i said, 2008 was a year of contrasts. At the We now need to break out of the current paradigm, end of the year, we were confronted with a in which our business is based on a single product significant decline in demand and this decline targeting a single market. has carried over into the first quarter of 2009. the deterioration of the global economy has certainly iNTeRVieWeR: Will customers remain a primary added a sense of urgency to the situation. Current focus for Domtar? economic conditions have made the execution of my mandate more challenging, but also more JDW: Definitely. And it’s to our advantage to know important than ever. in the very near term, in this as much as we can about them. And i think we challenging environment, we will have to develop need to know more. and implement decisive measures regarding our company’s operating cost structure. in uncoated freesheet, the end users are not our direct customers. We need to better understand iNTeRVieWeR: Operationally, how do you envisage demand dynamics and consumer behavior. We working through this downturn? need to find ways to grow in an “asset light” and “low-capital intensity” fashion. JDW: i’m determined to run our assets the best way we can to reduce the costs of balancing our iNTeRVieWeR: some might say this is a bad time production to customer demand. And this goes to be working in pulp and paper. What do you for the Wood business as well. We may only be say to that? near term owners, but we will run these assets as long-term owners and make investments JDW: i would respectfully disagree! there are where necessary. a lot of challenges that lie ahead but that just makes it more interesting. the companies that Margin retention is critical for us. We will closely make the right choices today will be leading the monitor customer orders and backlogs, making way when things improve tomorrow. And i plan the necessary adjustments and managing our to make sure Domtar is right there at the head business efficiently. of the pack.


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    �� biG rivEr, sK �� 250 MfbM Per YeAr �� Ear Falls, on (not oPerAting) 190 MfbM Per YeAr �� WasHinGton court HousE, oH (Converting And distribution oPerAtions ) � DryDEn, on 319,000 AdMt of � Kamloops, bc � PuLP Per YeAr �� 477,000 AdMt of PuLP Per YeAr � �� WHitE rivEr, on 110 MfbM Per YeAr (not oPerAting) � Espanola, on 77,000 st of PAPer Per YeAr 114,000 AdMt of PuLP Per YeAr �� rotHscHilD, Wi 147,000 st of PAPer Per YeAr �� nEKoosa, Wi 167,000 st of PAPer Per YeAr �� aDDison, il (Converting And distribution oPerAtions �� inDianapolis, in (Converting, forMs And distribution oPerAtions ) �� oWEnsboro, Ky (Converting And �� mira loma, ca distribution oPerAtions ) (Converting And distribution oPerAtions ) �� broWnsvillE, tn (Converting And �� rocK Hill, sc �� cErritos, ca �� �� distribution oPerAtions ) (forMs MAnufACturing (Converting, forMs And PLAnt) � distribution oPerAtions ) �� Dallas/Fort WortH, tX �� (Converting, forMs And distribution oPerAtions ) ● Distribution, supply anD sErvicE FacilitiEs EntErprisE Group fridLeY, Mn MiAMi, fL Domtar MontreAL, qC Addison, iL fort WAYne, in MiLWAukee, Wi Distribution Mount PeArL, nL ALbuquerque, nM gArLAnd, tX MontreAL, qC Group neW York, nY birMinghAM, AL hArAhAn, LA nAshviLLe, tn ALbAnY, nY ottAWA, on � asHDoWn, ar boise, id hAYWArd, CA okLAhoMA CitY, ok bALtiMore, Md / PhiLAdeLPhiA, PA 933,000 st of PAPer boston, MA hoboken, nJ oMAhA, ne WAshington, dC quebeC CitY, qC Per YeAr buenA PArk, CA houston, tX PeoriA, iL boston, MA southPort, Ct 86,000 AdMt of PuLP buffALo, nY indiAnAPoLis, in Pittsburgh, PA buffALo, nY toronto, on Per YeAr CALgArY, Ab JACkson, Ms riChMond, vA CinCinnAti, oh uniontoWn, oh Cerritos, CA JACksonviLLe, fL roCk hiLL, sC CLeveLAnd, oh � columbus, ms ChAndLer, AZ kAnsAs CitY, ks sACrAMento, CA CoLuMbus, oh 238,000 st of PAPer ChArLotte, nC kent, WA sALt LAke CitY, ut Covington, kY Per YeAr ChAttAnoogA, tn knoXviLLe, tn sAn Antonio, tX dALLAs / fort Worth, tX CinCinnAti, oh LAkeLAnd, fL st. Louis, Mo dArtMouth, ns CLeveLAnd, oh LAnghorne, PA sYrACuse, nY dAYton, oh CoLuMbus, oh LAs vegAs, nv toronto, on fort WAYne, in denver, Co LeXington, kY tuLsA, ok hArrisburg, PA des Moines, iA LittLe roCk, Ar vAnCouver, bC hArtford, Ct duLuth, gA LivoniA, Mi vAnCouver, WA indiAnAPoLis, in eL PAso, tX LouisviLLe, kY WAYLAnd, Mi LAnCAster, PA evAnsviLLe, in MeMPhis, tn London, on


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 1 1 ✪ montrEal, Qc ● fort MiLL, sC HEaD oFFicE opErations cEntEr 395 de MAisonneuve bLvd. West 100 kingsLeY PArk dr. MontreAL, qC h3A 1L6 fort MiLL, sC 29715-6476 �� mataGami, Qc 100 MfbM Per YeAr �� timmins, on 140 MfbM Per YeAr �� WinDsor, Qc 670,000 st of PAPer Per YeAr �� nairn cEntrE, on 33,000 AdMt of PuLP 130 MfbM Per YeAr Per YeAr �� GoGama, on 65 MfbM Per YeAr �� �� �� �� �� �� �� � �� �� stE-mariE, Qc ★ �� 70 MfbM Per YeAr (not oPerAting) �� �� WooDlanD, mE �� 398,000 AdMt of PuLP Per YeAr (not oPerAting) �� sullivan, Qc �� 75 MfbM Per YeAr �� �� port Huron, mi 116,000 st of PAPer Per YeAr �� �� val D’or, Qc � JoHnsonburG, pa 160 MfbM Per YeAr � 374,000 st of PAPer �� �� Dubois, pa Per YeAr (Converting And �� �� lanGHornE, pa distribution oPerAtions ) �� �� (forMs MAnufACturing PLAnt) �� riDGEFiElDs, tn � KinGsport, tn (Converting And �� � 425,000 st of PAPer distribution Per YeAr oPerAtions ) �� � � marlboro, sc �� 391,000 st of PAPer �� Per YeAr �� � �� �� tatum, sc �� (Converting And � distribution oPerAtions ) �� plymoutH, nc 199,000 st of PAPer Per YeAr 153,000 AdMt of PuLP � HaWEsvillE, Ky Per YeAr 634,000 st of PAPer Per YeAr 47,000 AdMt of PuLP Per YeAr �� GriFFin, Ga (Converting And distribution oPerAtions ) DEFinitions: ALL PAPer tonnAge is eXPressed in short tons (st). PAPer tonnAge is eXPressed bY MiLL CAPACitY. ALL PuLP tonnAge is eXPressed in Air drY MetriC tonnes (AdMt). PuLP tonnAge is eXPressed bY MiLL trAde PuLP. ALL Wood CAPACities Are eXPressed ● pulp and paper mills in MiLLion foot boArd MeAsure (MfbM). ● offsite converting and Forms operations notEs: ● Distribution, supply and service Facilities indefiniteLY idLed: ● sawmill operations PrinCe ALbert, sAskAtCheWAn PuLP MiLL


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    UNIVERSE THE DOMTAR DOMtAR CORPORAtiON iS NORtH AMeRiCA’s lARGest, And the WoRld’s second lARGest, inteGRAted MAnufActuReR And MARketeR of uncoAted fReesheet (ufs) PAPeR And A leAdeR in enViRonMentAlly And sustAinABle PRActices. SALES EBITDA EARNINGS EARNINGS CASH FLOW CAPITAL (iN MiLLiONS OF DOLLARS) BEFORE BEFORE BEFORE PROVIDED FROM EXPENDITURES ITEMS 2 ITEMS 2 ITEMS 2 OPERATING (iN MiLLiONS OF DOLLARS) (iN MiLLiONS OF DOLLARS) (iN MiLLiONS OF DOLLARS) (PeR DiLuteD SHARe) ACTIVITIES (iN MiLLiONS OF DOLLARS) 5,947 6,394 830 780 131 $0.28 606 163 88 116 $0.17 197 2007 1 2008 2007 1 2008 2007 1 2008 2007 1 2008 2007 1 2008 2007 1 2008 1. including domtar inc. from March 7, 2007. for a description of the transaction, refer to the 2008 Annual Report on form 10-k. 2. non-GAAP financial measure. consult the Reconciliation of non-GAAP financial Measures at www.domtar.com.


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 1 3 The Company employs Assets: Production capacity: nearly 11,000 people. 11 UFS pulp and paper mills. 4.1 million short tons Operates in 37 U.S. States 3 non-integrated pulp mills. of UFS paper. 238,000 short and 7 Canadian provinces. 1 CGW paper mill. tons of CGW paper. Ticker symbol: 18 converting and 1.3 million air dry UFS (NYSE/TSX) forms operations. metric tonnes of market pulp, 90+ distribution, supply net of external purchases. and service operations. FINANCIAL HIGHLIGHTS (In millions of U.S. dollars, unless otherwise indicated) 2007 1 2008 Sales 5,947 6,394 Operating income (loss) by segment Papers 321 (369) Paper Merchants 13 8 Wood (63) (73) Corporate (1) (3) Operating income (loss) 270 (437) Net earnings (loss) 70 (573) 81% Cash flow provided from operating activities 606 197 15% Additions to property, plant & equipment 116 163 Free cash flow 2 490 34 Net cash payments for interest 155 120 Net cash payments for income taxes 112 49 4% Total assets 7,726 6,104 Long-term debt, including current portion 2,230 2,128 Net debt-to-total capitalization 2 41% 50.1% SALES PER SEGMENT Total shareholders’ equity 3,197 2,143 n Papers Weighted avg. number of shares outstanding (diluted) 475.9 515.5 n Paper Merchants 1. Including Domtar Inc. from March 7, 2007. For a description of the transaction, refer to the 2008 Annual Report on Form 10-K. 2. Non-GAAP financial measure. Consult the Reconciliation of Non-GAAP Financial Measures at www.domtar.com. n Wood SYNERGIES LONG-TERM EMPLOYEE (ANNUALIZED) DEBT, INCLUDING HEADCOUNT (iN MiLLiONS OF DOLLARS) CURRENT PORTION (iN MiLLiONS OF DOLLARS) 250 2,230 2,128 13,000 11,000 130 2007 2008 2007 2008 2007 2008 SYNERGY PROGRAM $102 REDUCED BY 15% 15% SUCCESSFULLY $102 HEADCOUNT COMPLETED MILLION REDUCTION


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    PAPER IN OUR LIVES


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 1 5 The way we communicate is changing. Technology, the economy and even ecology are playing a critical role. Along the way, they’re changing the way we think about paper. Yet even as we explore the issues and consider our options, one constant remains. Paper is here to stay! Paper has value. It’s personal and human. It’s PAPER COMMUNICATES. From books and magazines to office memos and portable, yet secure. It’s consistent corporate publications, paper products are still essential to business communications. even in and permanent. But perhaps most the age of electronics, paper is a natural default. With paper, there’s no waiting for images to of all, paper is effective —whether as download. there’s no logging-on or finding a connection. there’s no scrolling. And when you a business tool, a marketing device, need to continue, just turn the page. it’s easy. Paper is still more legible, easier on the eyes and reader-friendly. a means of expression or an PAPER ASSURES. instrument of change. No matter if you want it legitimate, you’d better get it in writing. the dotted line. the bottom line. the how the use of paper evolves, fine print. it’s no coincidence that our lives — our births, our report cards, our learner’s permits, one thing remains —paper has our graduations, our marriages, our mortgages, our travels — and yes, ultimately our final been, and always will be, bequests — are documented on paper. Certified. Ratified. Signed, sealed and delivered on paper. part of our lives. PAPER IS PRACTICAL. From envelopes to stationery, gum wrappers to surgical gowns. Paper is fun for greeting cards, direct mail or origami. And paper is personal—from wedding invitations to thank you notes. PAPER MEANS BUSINESS. it informs us, persuades us, educates us and organizes us. A substrate for success, it’s the platform on which business plans — and civilizations—are built. From doodles on napkins to the Bill of Rights, when it’s time to get to work, we put our thoughts on paper.


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    It all begins with paper.


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 1 7 (CONtiNueD FROM PAGe 15) DOMTAR KNOWS PAPER. For the best in quality paper, extensive selection As North America’s largest and environmental responsibility, Domtar has the product to suit your needs. As North America’s integrated manufacturer largest integrated manufacturer and marketer of fine papers, Domtar is a recognized leader in and marketer of fine papers, environmentally-sustainable practices and in providing products that are environmentally Domtar is a recognized sound. From the forest floor to your front door, Domtar strives to earn your confidence and your leader in environmentally- business through the offering of superior quality products, dedicated services and continuous sustainable practices and in innovation. Domtar is constantly working to improve its products and offers a variety of providing products that are environmentally responsible products and a vast array of recognized brands for a wide range environmentally sound. of applications. All of Domtar’s forests and facilities are certified to the standards of the Canadian Standards DOMTAR PAPER IS SUSTAINABLE. Association (CSA), Forest Stewardship Council (FSC) or the Sustainable Forestry initiative® (SFi). in Because today’s customers are conscious of this way, Domtar can provide its customers with the products they both want and deserve. the impact their purchases may have on the environment, they want to make the right Domtar’s company-wide commitment to sustainability doesn’t stop with certification. With its choice — including their choice of paper. in order increased availability of certified product, Domtar developed a new, unique line of paper products to ensure the sustainability of its paper products, called earthChoice®. Certified to FSC standards, endorsed by the Rainforest Alliance and supported Domtar recognizes the importance of responsibly by WWF-Canada, earthChoice is now the most comprehensive line of socially and environmentally managing and protecting forests, and ensuring responsible paper products in the market. Domtar is eager to offer this line of papers to give environmental sustainability for generations to conscientious buyers and end users peace of mind when purchasing paper. come—Domtar knows that the best way to ensure that forestry, manufacturing and distribution PAPER TO SUIT YOUR NEEDS. operations are managed in a responsible, With all the paper choices in the marketplace today, Domtar strives to stand out and earn its customers’ sustainable and transparent manner is through business. that’s why it makes it a practice to develop a close relationship with customers, listening certification by internationally recognized third- carefully to discover the product attributes and services which truly add value. the following pages party organizations. illustrate that there’s a Domtar paper product for your every paper need. DOMTAR CATegORies Business Papers Commercial Printing and Publication Papers Converting and specialty Papers PAPER TyPe uNCOATeD FReesheeT Copy Premium Offset Opaques COATeD gROuNDWOOD No. 4 coated uNCOATeD FReesheeT Business converting gRADes PRODUCTS imaging / Colors Premium No. 5 coated Flexible packaging technology Index opaques Abrasive papers papers Lightweight Tag Decorative papers OFFERING Bristol Tradebook Imaging papers Labels Medical disposables Photocopies Commercial Stationery Catalogs Forms & envelopes APPLiCATiONs Office printing Brochures Magazines Food & candy wrappings documents Direct mail Annual reports Direct mail Surgical gowns Presentations Pamphlets Books Cards Repositionable note pads Brochures Catalogs Posters Security check papers Packaging


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    HIGH QUALITY PAPER WITH A CONSCIENCE DOMTAR EARTHCHOICE® IS THE LARGEST FAMILY OF ENVIRONMENTALLY RESPONSIBLE PAPERS EVER ASSEMBLED—a ComplEtE EnD-to-EnD solution for businEssEs that mEEts all of thEir papEr rEquirEmEnts whilE making a statEmEnt about thEir CommitmEnt to thE EnvironmEnt. with a single solution, customers get a range of options. that’s the beauty of EarthChoice—it’s the easiest way to make a significant environmental statement with the widest selection of sustainable paper products on the market. the EarthChoice family, certified to the standards of the forest stewardship Council (fsC), includes paper for corporate identity materials, business and office applications, digital printing, direct mail, transaction printing, converting, publishing and unique specialty applications. by designing the most responsible products for the widest variety of end uses, Domtar has taken the guesswork out of green purchasing—and turned it into an informed choice. now, the only thing anyone needs to remember is EarthChoice. BusiNess COMMeRCiAL DigiTAL sPeCiALTy & PRODuCT & OFFiCe PRiNTiNg PRiNTiNg PuBLishiNg CONVeRTiNg FsC-CeRTiFieD Cougar®     Cougar® DigitalChoice™    Lynx® Opaque     Lynx® Digital    HOTS®     EarthChoice® Office Paper    First Choice®    Domtar® Multi-System Ultra   EarthChoice® Wove Envelope  * ci2000® Envelope  * EarthChoice® Tradebook  * Domtar Lightweight Publishing Papers  * Domtar Strategic Specialty Items  * * Subject to availability


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 1 9 domtar EarthChoiCE® ProduCtS arE WORKING TOGETHER CErtifiEd to thE StandardS of thE forESt to earn endorsement from rainforest alliance for StEwardShiP CounCiL (fSC), EndorSEd all EarthChoice papers, domtar has committed to achieve by thE rainforESt aLLianCE and SuPPortEd fSC certification for 100% of the forests it manages and to by wwf-Canada. increase the amount of fSC-certified fiber from suppliers. the forest Stewardship Council (fSC) is an international, domtar has collaborated with wwf for the past decade, independent, not-for-profit organization comprised of social, working together to promote forest conservation and to environmental, and business entities. the standards set by advance environmentally responsible paper products in the fSC are widely supported by many environmental groups, the marketplace. the premier product in the EarthChoice line including rainforest alliance and wwf (world wildlife fund). is Cougar®, a premium uncoated opaque paper containing 10% post-consumer recycled content. domtar is pleased ultimately, fSC balances the interests of the forest products to make an annual contribution of $275,000 from the sale of industry, governments, environmental organizations, and Cougar as a symbol of our support to the environment, to indigenous peoples. the goal of fSC is not to prohibit forest Cougar and to our customers. the well-known wwf panda harvesting and paper production. instead, it has established logo appears on Cougar products and promotional materials, an authoritative set of guidelines that seek to minimize demonstrating Cougar’s commitment to wwf—one of the the environmental impact of these activities—and to foster most well-respected environmental organizations in the development of well-managed forests. world—by a leading brand in the graphic arts community for the past 35 years. www.domtarearthchoice.com


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    BUSINESS AND OFFICE PAPERS THERE’S A DOMTAR PAPER YOU CAN DEPEND ON for all your business, office and personal communication needs.


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 2 1 BUSY DAY AT THE OFFICE? GOING “GREEN” When you pick up a piece of paper, chances are you ◆◆ Weight. From light to heavy, Domtar Customers want paper that offers performance don’t give too much thought to how it was made, papers are developed with the appropriate today and makes a difference tomorrow. When it where the fibers came from, its weight, brightness weight, stiffness and bulk for quality paper comes to quality and environmental responsibility, and smoothness. A lot is taken for granted when handling and reliable performance on a Domtar earthChoice ® Office Paper delivers. we place a ream of paper into a desktop printer, variety of office equipment. the heavier the earthChoice Office Paper contains FSC-certified high-speed copier or digital printer. paper weight the better it is for double- virgin fiber and is endorsed by Rainforest Alliance. But as North America’s largest integrated manufac- sided printing. Complementary cover it is as dependable as it is responsible, proving turer and marketer of business and office papers, weights are ideal to match text for reports, that even the simplest applications can have a it’s Domtar's job to look closely at all these ele- proposals, presentations, business cards big impact. ments in order to provide customers with the and invitations. Specifying earthChoice Office Paper for all internal most reliable papers possible. And you can rest ◆◆ smoothness. it affects the look and feel office applications is an easy change that many assured that this commitment to superior quality of the paper. the smoother the paper, the financial institutions, corporations, healthcare products, service and continuous innovation is better the image looks. Domtar business companies, colleges and universities are starting matched by a balance of economic, environmental, and office papers are designed with optimal to make every day. examples include major North and social concerns. surface smoothness across each grade to American financial institutions such as CiBC and Let’s take a closer look at the key paper properties provide sharp, clean details and superior the Royal Bank of Canada, who last year switched that impact your business’s copy and print needs: reproduction quality. their office copy, printer and fax paper to FSC- thanks to Domtar, you can be assured of your certified Domtar earthChoice Office Paper and ◆◆ Brightness. Did you know the higher the brightness, the better the contrast paper’s reliable performance because of inno- engaged with suppliers like Domtar to promote of your printed material to the paper? vative manufacturing processes that meet the environmentally responsible paper options. High brightness is particularly important demanding requirements of varied electronic for printing rich, vibrant colors. As an imaging applications. example, Domtar’s First Choice® paper with Domtar business and office papers deliver the a dazzling white 98 brightness delivers quality, value and performance that allow users outstanding results. to focus solely on the printed material, with guaranteed results. ◆◆ First Choice® Multiuse ◆◆ First Choice ColorPrint® ◆◆ First Choice® ink Jet ◆◆ First Choice® Cover & Card ◆◆ Husky® Xerocopy Recycled Husky® A GREAT ◆◆ Xerocopy ◆◆ Domtar® Copy SELECTION ◆◆ ◆◆ ◆◆ Domtar Colors™ Laser Copy® Domtar earthChoice® Office Paper OF PRODUCTS ◆◆ Domtar® Multi-System ultra ◆◆ imagePrint®


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    BUSINESS AND OFFICE PAPERS A NEW STANDARD FOR PREMIUM PRINTING ABOUT COLORLOK® TECHNOLOGY Domtar has incorporated ColorLok® Technology into its First Choice®, Domtar® Multi-System Ultra and Image Print® lines of business papers. The evolution of today’s digital office printing equipment, along with the desire for more colorful, impressive- looking documents, has driven the need for a better printing solution: ColorLok® papers. Whether using ColorLok paper in the office or at home, it provides paper with advanced technology for all office printing equipment, allowing you to achieve superior printing. With inkjet printers, ColorLok paper allows for more vivid colors, noticeably bolder blacks and faster drying times — with no smearing. And with all other laser printers and copiers, you will get consistent, quality results. Non-Colorlok® Paper Colorlok® Paper


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 2 3 YOU WILL FIND DOMTAR BEHIND MANY GREAT BRANDS OF OFFICE PAPER. Domtar’s Private Brand Paper Program was created to offer customers an opportunity to brand and sell their company name on cut-size products manufactured by Domtar. Domtar provides customized packaging which allows customers to have their own unique labels, cartons and ream wrap.


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    OUR FAMILY OF COMMERCIAL cougar ® lynxopaque ® huskyoffset ® hots ® colors DOMTAR TM 98GE brightness 96GE 92 GE brightness 17 colors 15 colors brightness Smooth, FSC certified FSC Vellum & Reply Card FSC certified Acid- free certified sheets Smooth Smooth Press Smooth & Vellum & Vellum Ready Vellum & Vellum finishes finishes Skids finish finishes PRINTING PAPERS


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    DESIGNERS WANT EXCEPTIONAL IMAGE REPRODUCTION AND EXACTLY THE RIGHT EFFECT. PRiNteRS WANt CONSiSteNt RuNNABiLity AND ReADy SuPPLieS. CLieNtS WANt it ALL—iNCLuDiNG tHe RiGHt BRAND iMAGe, tHe BeSt VALue AND tHe PROMiSe OF eNViRONMeNtAL ReSPONSiBiLity. DOMtAR’s coMMeRciAl PRintinG PAPeRs seRVe the BRoAd needs of this diVeRse industRy. distRiButed PRiMARily thRouGh nAtionAl And ReGionAl PAPeR MeRchAnts to PRinteRs thRouGhout noRth AMeRicA, they ARe AVAilABle in Rolls oR sheets in A Wide RAnGe of sizes And WeiGhts. doMtAR’s RosteR of PRoducts includes soMe of the industRy’s Most tRusted BRAnds— BRAnds MAnufActuRed to the hiGhest stAndARds thAt PRoMise eXcellent PeRfoRMAnce And unBeAtABle VAlue foR Any BudGet. Plus, MAny of theM ARe PARt of the doMtAR eARthchoice® fAMily of enViRonMentAlly ResPonsiBle PRoducts. COUGAR ® LYNX OPAQUE ® HUSKY OFFSET ® HOTS ® COLORS TM www.domtar.com


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    COMMERCIAL PRINTING PAPERS cougar CONTAINING 10% POST-CONSUMER FIBER, COUGAR IS THE ONLY ® PREMIUM PRINTING PAPER ON THE MARKET THAT IS FSC-CERTIFIED AND ENDORSED BY THE RAINFOREST ALLIANCE. COugAR APPLiCATiONs iNCLuDe: Cougar ® remains a favorite because of its con- finishing techniques like embossing, foil-stamping ◆◆ Annual Reports sistent performance, uncompromising quality and die-cutting. ◆◆ Brochures and excellent value. its stellar brightness and Cougar is the premier member of the Domtar ◆◆ Corporate identity balanced white shade—in addition to its smooth, earthChoice® family of high-quality, socially and ◆◆ invitations uniform print surface and high opacity — deliver environmentally responsible papers. the well- ◆◆ Newsletters rich, vibrant colors and sharp images with startling known WWF panda logo appears on Cougar ◆◆ Premium Catalogs results. Cougar satisfies not only the sense of products and promotional materials, demon- ◆◆ Presentation Folders visual but tactile distinction, offering high-end strating Cougar’s commitment to WWF–one of the most well-respected environmental organi- zations in the world–by a leading brand in the graphic arts community for over 30 years. Domtar is pleased to make an annual contribution of $275,000 to WWF from the sale of Cougar brand products. World Wildlife Fund ® WWF Registered Trademark. Panda Symbol © 1986 WWF. WWF-Canada © 1986 Panda symbol WWF-World Wide Fund For Nature (also known as World Wildlife Fund) ® “WWF” is a WWF Registered Trademark


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 2 7 IT’S NO WONDER THAT PAPERS LIKE LYNX OPAQUE ARE THE HOUSE SHEETS IN PRESSROOMS ACROSS NORTH AMERICA. » FULLY ELEMENTAL CHLORINE FREE (ECF) AND LIGNIN-FREE » MADE ACID-FREE FOR LONGEVITY AND ARCHIVAL QUALITY » FSC-CERTIFIED AND PROUD MEMBER OF THE DOMTAR EARTHCHOICE FAMILY » ENDORSED BY THE RAINFOREST ALLIANCE » SFI FIBER SOURCING CERTIFIED Lynx ® Opaque responds to any print challenge LyNx OPAque APPLiCATiONs iNCLuDe: with superior image quality, dependable ◆◆ Brochures performance and superb value. Offering a ◆◆ Direct Mail BORN TO PRINT PRoMotionAl BRochuRe iMAGeRy FROM DOMtAR’s lynX® oPAQue dazzling brightness and standout opacity, Lynx ◆◆ Financial Documents Opaque never fails to impress users with rich ◆◆ Posters color reproduction and crisp, clean detail. the ◆◆ Statement Stuffers paper’s proven performance and printability make it the right choice for top quality, consistent runnability and superb value. Reliable, resourceful and cost-efficient, Lynx Opaque offers users a valuable asset to any print project. Lynx Opaque is also a good way for customers to make a statement about their environmental commitment—just like Cougar, it is FSC-certified. Lynx is the ideal choice for showcasing great ideas when considering quality, value and lynx opaque the environment. ®


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    Husky® Offset Run after run, Husky Offset leads the pack in trouble-free printing and consistent quality. A reliable on-press performer, Husky Offset’s exceptional versatility is guaranteed to deliver for just about any type of printing project. Husky Offset will go the distance without exhausting your budget. SFi Fiber Sourcing certified and manufactured chlorine-free and acid-free, Husky Offset also delivers archival quality for long life. Husky Offset sheets are packed on press-ready skids that are fork lift and pallet-jack friendly to reduce waste as well as for convenient, ease of handling. With a maximum skid height of 45” and unique to Domtar, these press-ready skids easily fit into most presses. HOTS® Domtar’s HOTS is the smart paper choice when you need a shot of pure, vivid color for eye-catching impact. Available in an array of 17 brilliant, fluorescent colors, HOTS delivers a powerful visual punch to presentations, invitations, newsletters, direct mail and more. Made acid-free for archival quality, HOTS is FSC-certified and SFI Fiber Sourcing certified and a member of Domtar’s environmentally responsible EarthChoice® family of papers. Colors TM husky offset With its sunny pastel palette Domtar Colors is the perfect choice to make a colorful splash for manuals, menus, folders and business reports, while adding shimmering impact to flyers, publications COMMERCIAL and newsletters. Its wide range of colors, weights and sizes in both smooth and vellum finishes lends itself to an endless PRINTING array of refreshing possibilities. And to broaden users’ creative latitude, Domtar ® PAPERS Colors’ cut sizes are guaranteed on laser HOTS TM ® and inkjet printers and photocopiers. Made colors acid-free for longevity, the Domtar Colors line is also SFI Fiber Sourcing certified. ◆◆ Bulletins ◆◆ Announcements ◆◆ Announcements ◆◆ Catalogs ◆◆ Brochures ◆◆ Booklets ◆◆ Coupons ◆◆ invitations ◆◆ Bulletins ◆◆ Direct Mail ◆◆ Menus ◆◆ Business Reports ◆◆ Financial ◆◆ Newsletters ◆◆ Cards Documents ◆◆ Presentation ◆◆ File Folders ◆◆ Flyers Folders ◆◆ Flyers ◆◆ Manuals ◆◆ Labels ◆◆ Newsletters ◆◆ Manuals ◆◆ textbooks ◆◆ Menus ◆◆ Newsletters ◆◆ tags


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 2 9 technology is constantly inspiring all industries… including the World of print. With a need for personalization, faster turnaround times and concerns about environmental issues, the print community is shifting to a neW technology called digital printing. Why the buzz? What’s neW? it’s all about catering to the needs, desires and wants of the consumer to gain loyalty. Domtar launched Cougar® DigitalChoicetM Consumers thrive on personalization. On a daily basis, they can be hit with more Super Smooth, a premium product featuring than 5,000 advertising messages. Only the unique personalized messages grab a new extra smooth finish. With a superior their attention and potentially compel them to act. And with consumers becoming printing surface and balanced white shade, mindful of the environmental impact of their actions, digital printing allows the Cougar DigitalChoice works flawlessly across printing of only the material needed at that time. Digital printing also requires fewer all digital printing platforms. Whether you chemicals for printing, making it a more responsible choice. need a color copy, business brochure, flyer, newsletter or more… and you need it extra Domtar digital printing papers are specifically engineered for high-volume smooth… Cougar DigitalChoice Super Smooth technologies using a variety of inks and toners. Part of the Domtar earthChoice® is the product for you. family of responsible papers, they offer exceptionally smooth surface characteristics for crisp images and text. Domtar provides optimized products guaranteed to perform across a wide platform of production digital devices such as Xerox, Kodak, Konica Minolta, HP, Canon and Océ.


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    discover Saturn ® and stretch the limits of your imagination.


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    With the recent arrival of Saturn®, a new coated groundwood paper from Domtar, the world of printing just got a whole lot bigger. With superior ink holdout and press performance that mirrors Choctaw, this improved No. 4 paper is now available in gloss and matte finishes, and four weights: 40 lb., 45 lb., 50 lb. and 60 lb. Stretch the limits of your imagination. Discover Saturn. www.domtar.com


  • Page 34

    Domtar publishing papers bring words and images to life... ...MAKING ANY PROJECT A PAGE TURNER WHetHeR iN CAtALOGS, MAGAziNeS, BOOKS OR OtHeR PuBLiCAtiONS, CuStOMeRS LOOK FOR OutStANDiNG CLARity iN tyPe, iLLuStRAtiONS AND PHOtOGRAPHy. DOMtAR PuBLiSHiNG PAPeRS ARe DeSiGNeD tO MAKe WORDS AND PiCtuReS LOOK tHeiR BeSt. SeVeRAL WeiGHtS AND FiNiSHeS ARe OFFeReD FOR tHe RiGHt FeeL AND FOR tROuBLe-FRee PeRFORMANCe ON PReSS. FSC-CeRtiFieD OPtiONS iN tHe eARtHCHOiCe® FAMiLy OF PAPeRS ARe ALSO AVAiLABLe. COVeR tO COVeR, it doesn’t Get Any BetteR thAn this. CATEGORY DOMTAR PRODUCT OFFERING APPLICATIONS coated saturn® commercial Printing Groundwood choctaw® catalogs direct Mail Magazines lightweight Vista® ultra Bibles/Religious texts opaque Vista® opaque Reference Books Printers opaque directories/catalogs century Premium® opaque commercial Printing Guardian® opaque textbooks Book Publishing Pharmaceutical inserts heavyweight domtar tradebook Reference Books Book earthchoice® tradebook directories/catalogs Westminster® opaque commercial Printing Westminster® offset textbooks Book Publishing PAPERS


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    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 3 3 CONVERTING AND SPECIALTY PAPERS DOMTAR LASER FORMS BOND High-quality bond sheets that can be cut and configured to your unique CONVERTING specifications. used for business forms, continuous forms, high-speed equipment, invoices, single part and multi-part forms and variable data. PAPERS DOMTAR PRODUCES CONVERTING BROWN KRAFT PAPERS FOR A VARIETY OF END USES, An envelope product with exceptional strength and durability charac- ALL WITH EQUALLY SPECIALIZED teristics, designed for a wide range of converting equipment. Great for REQUIREMENTS FOR PERFORMANCE. inter-office envelopes, x-ray envelopes, bubble mailers and banking/ WHEN CRITICAL MEASUREMENTS, financial envelopes. FLEXIBILITY AND OUTSTANDING IMAGE ci2000® ENVELOPE REPRODUCTION MATTER, LET DOMTAR Optimized envelope for the demands of flexographic printing, offering a PROVIDE QUALITY SOLUTIONS FOR ALL unique, economical alternative to coated products. YOUR CONVERTING PAPER NEEDS. WHITE WOVE ENVELOPE especially made to withstand die-cutting, folding and gluing. these enve- lope products can be used for commercial and retail envelope products and direct mail. MEDICAL PAPERS From industrial clean room wipes to gown and drape bases, Domtar provides papers receptive to SPECIALTY multiple forms of sterilization. Features include pore size and porosity control and specialized fiber blends for optimal cleanliness. All products are designed for custom end uses. PAPERS IMAGING PAPERS THANKS TO ITS SPECIALTY PRODUCTS Domtar base stocks and security papers provide enhanced imaging and increased protection for PORTFOLIO, DOMTAR CAN MEET THE its customers. they are available with security features like watermarks, dyed fiber and signal stain NEEDS OF CUSTOMERS IN IMPORTANT capabilities that guard against unauthorized reproduction. NICHE MARKETS. BY PARTNERING WITH BUSINESSES ACROSS MANY INDUSTRIES, INDUSTRIAL PAPERS DOMTAR CREATES CUSTOMIZED these hard-working papers are engineered to meet the demanding needs of customers. these products PRODUCTS FOR THE MOST SPECIFIC have excellent strength properties that have been developed to withstand the toughest applications APPLICATIONS. FROM LARGE RUN and converting processes. this includes base stocks for carbonless products, masking tapes, ream wrap SPECIALTIES LIKE CHECK PAPERS AND and others that exceed industry standards and uniform coating surfaces in various finishes. REAM WRAP, TO SMALL RUN TECHNICAL FOOD PACKAGING PAPERS ITEMS INCLUDING STERILIZABLE MEDICAL From grease-resistant food papers to base papers for printable bags and wrappers, Domtar custom- APPLICATIONS, THE ABILITY TO DELIVER tailored solutions meet the most unique food packaging requirements. Features include: water A ONE-OF-A-KIND PRODUCT IS AN resistance, grease-resistance, ovenable qualities (baking papers) and excellent strength properties. IMPORTANT COMPETITIVE ADVANTAGE.


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    UNIQUE END USES FOR DOMTAR PRODUCTS ʎ◆ Bakery liners ʎ◆ Lollipop and cotton and tissues swab sticks ʎ◆ Baking and ʎ◆ Masking tape condiment cups ʎ◆ Microwave ʎ◆ Bandage wrap popcorn bags ʎ◆ Bibles ʎ◆ Molded dining ware ʎ◆ Hymnals ʎ◆ Paint masking tape ʎ◆ Burger wrappers ʎ◆ Perfume boxes ʎ◆ Candy pouches ʎ◆ Pharmaceutical ʎ◆ CD and DVD inserts packaging ʎ◆ Plastic laminates ʎ◆ Checks ʎ◆ Point-of-sale ʎ◆ Church offering receipt rolls envelopes ʎ◆ Post-it style notes ʎ◆ Colored gift tissues ʎ◆ Powdered cellulose ʎ◆ Dental tray covers products ʎ◆ Desktop blotters ʎ◆ Quick-serve ʎ◆ Dinnerware restaurant packaging (melamine) ʎ◆ Restaurant ʎ◆ Disposable diapers placemats ʎ◆ Drafting paper – ʎ◆ Self-adhesive labels architectural ʎ◆ Shopping bags drawings ʎ◆ Silicone release ʎ◆ Dry cleaner papers hanger paper ʎ◆ Steel interleaving ʎ◆ electrical paper capacitor paper ʎ◆ Sugar packets ʎ◆ Feminine hygiene ʎ◆ Surgical gowns products ʎ◆ toilet paper and ʎ◆ Filter papers – toilet paper wrap wet and dry ʎ◆ Financial proxy statements ʎ◆ Freezer wrap ʎ◆ Gaskets ʎ◆ Gasket paper ʎ◆ ice cream wrap ʎ◆ incontinence products for adults ʎ◆ Laminate overlay and base paper ʎ◆ Laminated gum and cigarette packages


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    Cougar . ® Feel the difference. Want every job you do to feel unique? Choose Cougar®. It is perfect for attention grabbing techniques like varnishes and textured coatings. And here is something else you can feel good about: As the premier member of Domtar’s EarthChoice® family of products, Cougar is FSC-certified and endorsed by the Rainforest Alliance. Domtar is pleased to make an annual contribution of $275,000 to WWF from the sale of Cougar brand products. World Wildlife Fund ® WWF Registered Trademark. Panda Symbol © 1986 WWF. WWF-Canada © 1986 Panda symbol WWF-World Wide Fund For Nature (also known as World Wildlife Fund) ® “WWF” is a WWF Registered Trademark


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    NOT PULP FICTION THE PROCESS OF MAKING PAPER REQUIRES BREAKING DOWN AND COOKING WOOD FIBER TO OBTAIN A SLURRY OF CELLULOSE FIBERS. DOMTAR HAS SEVERAL MILLS THAT SPECIALIZE IN THE PRODUCTION OF BLEACHED PULP PRODUCTS MADE WITH EITHER SOFTWOOD OR HARDWOOD FIBER. THIS PULP IS SOLD ON THE WORLD MARKET FOR PAPERMAKING AND A VARIETY OF SPECIALTY APPLICATIONS. THESE INCLUDE PAPERS FOR CATALOGS AND MAGAZINES, COPY PAPER, LIGHTWEIGHT PAPERS, TISSUE AND TOWELING AND FLEXIBLE PACKAGING. DOMTAR MANUFACTURES FLUFF PULP FOR USE IN BABY DIAPERS, FEMININE HYGIENE AND ADULT INCONTINENCE PRODUCTS. PLYMOUTH FLUFF IS HIGHLY REGARDED BY CUSTOMERS WORLDWIDE FOR THE EASE IN WHICH FIBERS SEPARATE AND FORM A HIGHLY ABSORBENT QUALITY PRODUCT. IT IS PRODUCED IN ROLLS THAT ARE CUSTOM SIZED FOR THE CUSTOMER. DOMTAR PRODUCES SPECIALTY FIBERS SPECIFICALLY DESIGNED FOR FIBER CEMENT APPLICATIONS, SUCH AS INTERIOR CEILING TILES, TILE BACKERBOARD, EXTERIOR SIDING AND TRIMS. OTHER SPECIALIZED PULP GRADES ARE USED TO MAKE MOLDING COMPOUND FOR THE PRODUCTION OF MELAMINE DINNERWARE AND ELECTRICAL COMPONENTS. RECLAIMED FIBERS FROM THE KAMLOOPS MILL ARE PROCESSED AND SOLD AS AN ABSORBENT PET BEDDING PRODUCT. PULP AND PAPER MILLS NON-INTEGRATED THAT PRODUCE PULP IN EXCESS PULP MILLS OF INTERNAL REQUIREMENTS Dryden, ON Ashdown, AR Kamloops, BC Espanola, ON Woodland, ME Hawesville, KY Plymouth, NC Windsor, QC


  • Page 39

    D O M T A R ⁄⁄⁄ A N N u A L R e V i e W ⁄⁄⁄ 2 0 0 8 ⁄⁄⁄ 3 7 KNOCK ON Domtar operates six sawmills and one remanufacturing facility. it owns three sawmills that are currently not in operation. in addition, Domtar has investments in three other WOOD FROM WOOD TO WOOD PRODUCTS Domtar manufactures, markets and distributes lumber and wood- based value-added products, and it also manages forest resources. wood products Domtar offers a variety of grades of kiln-dried softwood lumber, companies. produced mainly from black spruce and jack pine. This lumber is used worldwide for specialized construction applications such as framing. All Domtar lumber is manufactured in compliance with National Lumber Grades Authority (NLGA) grading rules. Domtar Ear FaLLS, On also offers its customers lumber certified to the rigorous standards of the Forest Stewardship Council (FSC). IN OPERATION: , On gOgaMa In addition to lumber, Domtar also provides co-products such as C aMI, Q wood chips, sawdust, shavings and bark to numerous internal MaTag CURRENTLY , On and external customers. C E nTrE n naIr TI M M InS , On SEEING THE FOREST FOR THE TREES , QC The forest is a valuable resource shared by stakeholders with as many D ’Or VaL C interests as there are leaves on trees. That’s why Domtar is committed ,Q to using practices that ensure the sustainability of the forest, while an L LIV SU continuing to access the wood fiber that is critical to its future. The company believes that the best way to optimize the 28 million acres of forestland it directly licenses or owns in the United States and Canada is to apply internationally recognized sustainable forest management practices that are certified by respected third parties. Domtar operates in compliance with a rigorous Environmental Management System (EMS) adapted from a model developed by the International Standards Organization (ISO), and most of its forestland operations are currently registered under the ISO 14001 environmental standard. Many of its forests are also FSC-certified, while others are in the accreditation process.


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    OCCUPATIONAL HEALTH AND SAFETY SAFE= PEOPLE SMART PEOPLE DOMTAR EMPLOYEES ARE ITS BIGGEST CHAMPIONS WHEN IT COMES TO OCCUPATIONAL HEALTH AND SAFETY (OH&S). THEY KNOW THAT KEEPING THEMSELVES AND THEIR COLLEAGUES SAFE IS A DIRECT RESULT OF HOW THEY THINK AND ACT ON THE JOB. THEY TAKE THIS KIND OF RESPONSIBILITY VERY SERIOUSLY, AND CONTRIBUTE DAILY TO IMPROVING THE COMPANY’S SAFETY PERFORMANCE BY ENHANCING WORK PROCESSES AND SHARING lessons learned. • Their efforTs are supporTed by managemenT, unions, in-house safeTy experTs, AND A FRAMEWORK OF HEALTH AND SAFETY PROGRAMS, PROTOCOLS AND REGULATIONS THAT ARE ENFORCED WITH ZERO TOLERANCE. THE IMPORTANCE OF OH&S IS INGRAINED IN THE DOMTAR CULTURE AND A KEY PRIORITY THROUGHOUT THE YEAR – EVERY YEAR.


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    DOMTAR ⁄⁄⁄ ANNuAL ReVieW ⁄⁄⁄ 2008 ⁄⁄⁄ 39 2008: ASUCCESSFULYEAR 2008 WAS A HeALtH AND SAFety SuCCeSS FOR DOMtAR AND itS eMPLOyeeS, WHO iMPROVeD tHeiR SAFety PeRFORMANCe By 15% OVeR tHe PReViOuS yeAR. tHe NuMBeR OF LOSt WORKDAyS ALSO DeCLiNeD By 13% iN 2008 COMPAReD tO 2007, SuGGeStiNG A ReDuCtiON iN tHe SeVeRity OF LOSt-tiMe iNCiDeNtS. A CONtiNueD FOCuS ON NuRtuRiNG A StRONG, eMPLOyee-DRiVeN SAFety CuLtuRe At ALL OF itS LOCAtiONS WiLL HeLP DOMtAR ACHieVe itS uLtiMAte SAFety GOAL OF BeCOMiNG tHe OCCuPAtiONAL HeALtH AND SAFety LeADeR iN itS iNDuStRy iN NORtH AMeRiCA. LOOKING AHEAD DOMTAR WILL CONTINUE TO DEVELOP AND IMPLEMENT ITS SAFETY POLICIES, WITH A SPECIAL FOCUS ON ACTIVITIES SUCH AS SAFETY BEHAVIORS AND TECHNICAL COMPETENCY AND TRAINING. TAKING THE BULL BY THE HORNS EMPLOYEE INGENUITY PLAYS A MAJOR ROLE IN ESTABLISHING A SAFE AND HEALTHY WORK ENVIRONMENT FOR ALL. THIS CREATIVITY IS SHOWCASED THROUGH INITIATIVES SUCH AS THE NEW, SAFER BOXES BUILT BY BILL LAWSON FROM THE KINGSPORT MILL TO STORE ROLL SLIPPER KNIFE BLADES ON THEIR WAY TO AND FROM BEING SHARPENED; THE FREE HEALTH SCREENINGS FOR EMPLOYEES AND ON-SITE CONTRACTORS OFFERED AT THE MARLBORO MILL; AND THE PRACTICE OF REQUIRING ALL NEW ESPANOLA EMPLOYEES TO WEAR GREEN HATS FOR FOUR MONTHS SO THEIR COLLEAGUES CAN IDENTIFY INDIVIDUALS WHO MIGHT NEED AN EXTRA HAND. BE SMART » BE SAFE!


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    AT DOMTAR, PAPER IS A PEOPLE BUSINESS. NEKOOSA MILL, WISCONSIN Daniel Savage – Paper Mill Maintenance Supervisor ENGINEERING Ahmad Musallam – Engineering and Domtar engineers are as diverse as the field Planning Superintendent of engineering itself. Ronald Miller – Senior Project Engineer Randy May – Senior Project Engineer They work on projects in virtually every part James Love – Maintenance Planner of the company, from papermaking to the environment, maintenance, systems and operations. On any given day, you can find PORT HURON MILL, MICHIGAN Anna Denslow – Entry Accountant an engineer providing technical support Matthew Wood – Controller to improve and optimize paper machines, Jennifer King-Elsner – Accounting Supervisor pulping energy generation and recovery, PEOPLE LISTENING TO THE just to name a few. They provide expert advice on the best equipment to support the production process, and develop strategies to keep it running efficiently. They are the company’s watchdogs for SALES AND ACCOUNT environmental performance, making sure that MANAGEMENT all relevant standards are met, and recording Domtar is in the business of selling paper and, and transmitting key data to regulatory to do so successfully, it needs an ace team in authorities. the field able to demonstrate the superiority of its products in meeting the needs of end users. They manage capital projects worth millions of Whether in commercial printing, business and dollars that directly impact Domtar’s business. office papers, publishing, specialty or Show us a key process, and we’ll show you a converting papers, they are the face of Domtar Domtar engineer hard at work! with customers. They host sales and product presentations, and execute sales and “ Engineers are an integral marketing initiatives. part of any mill team. We Account Managers, in addition to nurturing focus on bringing value to the customer relationships, manage marketing operations in the safest, most programs and handle supplier relationships. environmentally responsible and Sales reps are responsible for reaching sales cost-effective manner possible.” targets and carving out new market share Ahmad Musallam within their allotted territory. Engineering and Planning Superintendent, Any way you slice it, it’s sales that get product Nekoosa Mill into the hands of Domtar customers!


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    DOMTAR ⁄⁄⁄ ANNuAL ReVieW ⁄⁄⁄ 2008 ⁄⁄⁄ 41 The company is proud to command the expertise of nearly 11,000 of the best-qualified and most dedicated employees in the industry. To make sure it continues to be an employer of choice, Domtar offers its people competitive programs and benefits, as well as numerous opportunities to spread their wings, both personally and professionally. The company also supports equal opportunity by recruiting diverse talent throughout North America. This people-oriented approach has enabled Domtar to build up a pool of experts in a multitude of fields. heAD OFFiCe, MONTReAL, qC Frédérick Leduc – Junior Analyst, it Asset Management Michelle Richard – Human Resources Advisor shawn Freeman – Senior Analyst, it Asset Management INFORMATION TECHNOLOGY FINANCE TECHNOLOGY INNOVATION the realm of information technology, or it, the accounting profession plays a key strategic New product development at Domtar goes extends from the implementation of cutting- role in Domtar’s business! from the idea stage all the way to the page. edge software to the smooth operation of the company’s finance team is made up using the latest technologies, the company’s the company’s servers and the security of its of accredited professionals (Chartered paper development experts, which include electronically-based intellectual property. Accountants, Chartered Financial Analysts, doctors in pulp and paper science, create it Project Managers are responsible for Certified General Accountants, etc.) who everything from optimal performing sheets to overseeing the daily execution of high-value faithfully compile, analyze, consolidate and specialty medical applications and food and initiatives, while balancing budgets, and report Domtar’s monthly, quarterly and candy wrappers for Domtar customers. allocating personnel to key tasks. they annual financial results. And, because their work covers the entire must also have a keen understanding of With Domtar operations in Canada and the manufacturing process, they collaborate with the company’s business so that they can u.S., these accountants face unique challenges people throughout the mill, like paper machine recommend the best technology solutions as they reconcile numbers for a variety of operators, quality assurance and marketing, as and processes to support operational needs. deliverables, from taxation documents to well as external partners for “real world” testing. For an organization like Domtar, with dozens government forms and full disclosure reports Domtar also has researchers working on key of locations across North America, it is for internal and external auditors on both sides environmental issues, such as optimizing the one of the fundamental building blocks of of the border. they also provide support and use of biofuels in the mills. business success. expertise to both the company’s operational Never one to rest on its laurels, Domtar is and corporate functions. it is where it’s at! always in search of the newest and greatest there is no doubt about it, Domtar can count innovations! “ Our team is responsible on them! for IT purchasing and asset management for most Domtar “ I’ve received a lot of support from locations and many projects. Domtar in developing my I get to collaborate with people accounting career. The company across the company and have helped fund my university to understand a broad range degree, and will support me as of technology requirements. ” I embark upon obtaining my CMA designation.” Frédérick Leduc Junior Analyst, it Asset Management Jennifer King-elsner Accounting Supervisor, Port Huron Mill


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    LABOR RELATIONS BUILDING SUSTAINABLE RELATIONSHIPS At Domtar, labor negotiations are approached in a spirit of collaboration and transparency with the unions that cover the company’s u.S. and Canadian pulp and paper mills, as well as some of its converting and distribution centers. indeed, rather than confine discussions to the negotiation table, head office HR and mill management keep the lines of communication open with union representatives on key issues and concerns such as benefits and health and safety. Over the years, this model has helped establish a collegial and productive rapport between both parties. this relationship, based on mutual respect and collaboration, between Domtar and its affiliated unions formed the basis for the successful negotiation in 2008 of a four-year umbrella agreement for the ten mills covered by the united Steel, Paper and Forestry, Rubber, Manufacturing, energy, Allied industrial and Services Workers international union (uSW). the agreement, the first of its kind for Domtar, addresses broad matters such as salary increases and pension benefits. Specific local issues continue to be worked out at the mill level. Mill management maintain open lines of communication with employees and their local union representatives to work through issues as they arise in a productive and collaborative manner. LABOR RELATIONS AT “ We understand that the unions are representing our employees DOMTAR ARE FOUNDED ON and we value their efforts. ONE SIMPLE FACT: PEOPLE It’s important that we maintain a positive relationship with ARE IMPORTANT. THEIR employee representatives if TALENT DRIVES THE BUSINESS we want to achieve mutually beneficial objectives. In the end, AND, WITHOUT THEM, THERE we all want what’s best for Domtar WOULD BE NO DOMTAR. and its workers.” Michel Dagenais Senior Vice-President, Human Resources


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    DOMTAR ⁄⁄⁄ ANNuAL ReVieW ⁄⁄⁄ 2008 ⁄⁄⁄ 43 INEXHAUSTIBLE DOMTAR PEOPLE ARE NOT ONLY PAPERMAKERS… WHO KNEW THERE WERE SO MANY TYPES OF JOBS AT DOMTAR? AN ADMINISTRATIVE ASSISTANT AUTO MECHANIC BUYER CARPENTER SUPPLY OF CHEMIST COMMUNICATIONS ADVISOR COMPUTER-BASED TRAINER CREDIT ANALYST KNOW-HOW! DOMtAR VieWS ALL itS eMPLOyeeS AS A SOuRCe OF CUSTOMER SALES ANALYST ELECTRICIAN ENVIRONMENT TECHNICIAN FIRE CHIEF / INSPECTOR GOVERNMENT RELATIONS ADVISOR iNVALuABLe KNOWLeDGe AND SKiLLS. AS SuCH, tHey GRAPHIC DESIGNER PLAy AN ACtiVe ROLe iN tHe COMPANy’s eVolution. HAZMAT SPECIALIST eMPloyees At eVeRy leVel of the oRGAnizAtion HUMAN RESOURCES SPECIALIST MAke theiR MARk By leAdinG And PARticiPAtinG IN-HOUSE LAWYER in continuous iMPRoVeMent initiAtiVes thAt BRinG IT SUPPORT TECHNICIAN ABout PositiVe oPeRAtionAl chAnGe. Who BetteR LAB TECHNICIAN to MAke A PRocess MoRe efficient thAn those Who MARKETING SPECIALIST deAl With it dAy in, dAy out? NURSE eMPloyees ARe VAlued MeMBeRs of Joint heAlth And PAYROLL ADMINISTRATOR sAfety coMMittees, WheRe they BRinG theiR uniQue PRODUCT DEVELOPMENT SPECIALIST PeRsPectiVe on hoW to ensuRe eVeRyone Goes PRODUCTION PLANNER hoMe sAfely At the end of theiR shift. QUALITY CONTROL TECHNICIAN RECEPTIONIST thRouGh oPen coMMunicAtion And By ActiVely SAFETY MANAGER enGAGinG eMPloyees And theiR RePResentAtiVes, SECURITY GUARD doMtAR hAs cultiVAted A coRPoRAte cultuRe in SUMMER STUDENT Which PeoPle ReAlly do coMe fiRst. TRUCK DRIVER WAREHOUSE MANAGER WELDER


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    200 Su 7 sta in a b le Gro wt hR For detailed information on e po rt SUSTAIN Domtar’s commitment to 1• of 2 • 3 sustainability, consult the Bo the T tto rip m L le Fact envi s abo 2007 Sustainable Growth Report Do ine ron ut D me o nta mtar’ l an s d so econo E m t cia m l pe ic, ABILITY at www.domtar.com a r th ra rfo rm ance No Ch rt envi h Am oic ron erica me nta ’s lead where you can also read elly resp ing lin onsi e of ble pap e rs the company’s sustainability- related policies and position papers. SU ST POWAINA THE Am essa ER O BIL F BA ITY ge from Raym ond LAN Roye r, Pr ST AT EM LI FE EN SU CE T ON esid ent and CEO CY ST AI M AN CL E NA W OR AG M AN BL IN G E GR KI NG FO AG OW RE EM TH TO ST S EN GE RE T TH SP ER ON FO SI BL RA GO Y OD CA US E A QUESTION OF BALANCE AS A COMPANY WHOSE BUSINESS RELIES ON NATURAL RESOURCES, DOMTAR TAKES SUSTAINABILITY VERY SERIOUSLY. IT UNDERSTANDS THE IMPACT OF ITS ACTIVITIES, AND HAS THUS MADE RESPONSIBLE FOREST MANAGEMENT A CORE TENET OF ITS MISSION. IT ALSO RECOGNIZES THAT IT HAS AN IMPORTANT ROLE TO PLAY IN ITS HOME COMMUNITIES. THROUGHOUT 2008, DOMTAR MAINTAINED ITS FOCUS ON ALL THREE DIMENSIONS OF THE “TRIPLE BOTTOM LINE”, NAMELY THE ECONOMIC, ENVIRONMENTAL AND SOCIAL IMPACTS OF THE COMPANY’S OPERATIONS. Forest Stewardship Council COMMITTED TO SAFEGUARDING THE ENVIRONMENT (FSC) fscus.org and fsccanada.org For Domtar, reducing the environmental impacts of its operations is essential to the business of making paper. The company has made being “green” an the Forest Stewardship Council is an international, independent, not-for-profit organization that sets global standards for responsible operating value through initiatives such as third-party certification of its forestry. FSC standards address important economic, social and environmental concerns in the forest products industry — and are widely forests and operations, the expansion of its Domtar earthChoice® line of papers, accepted by over 85 leading environmental groups. and the relationships it has nurtured with leading environmental groups. Sustainable Forestry Domtar’s environmental commitment has been recognized by leading Initiative® (SFI) authorities at the national and state levels. Domtar was named one of the sfiprogram.org “2008 Best 50 Corporate Citizens” by Corporate Knights, the Canadian maga- the SFi is a fully-independent, non-profit forest and paper certification program that integrates the perpetual growing and harvesting of trees with zine for responsible business. its Marlboro Mill received a South Carolina the preservation of wildlife, plants, soil, water and air quality. in order to be environmental excellence Program certificate for its continued dedication certified, participants in the SFi program must undergo a thorough, third- party review of their operations by an accredited audit firm. to the environment.


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    DOMTAR ⁄⁄⁄ ANNuAL ReVieW ⁄⁄⁄ 2008 ⁄⁄⁄ 45 { VIRGIN VS. Virgin fiber from forests harvested using recognized third-party certified forestry “ The influx of virgin fiber is mandatory in the paper cycle. RECYCLED, AN practices is just as environmentally sound as recycled fiber. The key is to choose virgin fiber that is sourced from well- UNNECESSARY to learn more, read about Domtar’s position on the issue of virgin vs. recycled fiber in managed forests and to request recycled fiber content for BATTLE the 2007 Sustainable Growth Report at www.domtar.com. well-suited paper grades.” guy Boucher, Vice-President Sustainability hOW DOes iT WORK? DOMTAR JOINS under the CCX, members make a voluntary but legally binding agreement to meet annual GHG THE CHICAGO emission reduction targets. they are issued a given number of allowances in accordance with these targets. if they reduce below the targets, they have surplus allowances they can bank for the future CLIMATE or they can trade to other companies through the CCX. those who emit above their targets can still comply with the program by purchasing additional allowances from the CCX. the number of EXCHANGE (CCX) allowances, therefore, remains stable as some companies sell theirs to others that need them. DOMTAR’s MeMBeRshiP WhAT is The CCx? Domtar became a member of the Chicago Climate exchange (CCX) in 2008, voluntarily the CCX is the only active voluntary, legally committing to achieve a GHG emissions reduction of 6% by 2010, compared to 2000 levels. binding cap-and-trade system in North this latest initiative supports the company’s previous efforts to reduce its carbon footprint by America aimed at the registry and reduction decreasing its use of fossil fuels by over 21% for the 2002-2007 period, by reducing its GHG emissions by of greenhouse gas (GHG) emissions with offset 21.5% during the same period, and by using approximately 79% renewable energy in its facilities. projects worldwide. Domtar’s quest for excellence in energy efficiency and the reduction of its environmental footprint are both integral parts of the company’s focus on sustainable practices. Joining the Chicago Climate exchange and making a formal commitment to reduce its GHG emissions will further drive Domtar’s ongoing efforts to increase its energy efficiency and reduce its environmental footprint. ECONOMIC PERFORMANCE the Kingsport Mill took home the national the Dryden Mill has held a popular conserva- the economic challenges of 2008 forced Domtar Siemens Sustainable Community Award in the tion course for high school students for the last to take some difficult decisions to help assure its Small Community category thanks to initiatives 52 years. the espanola Mill provides access to long-term sustainability. Sadly, these decisions such as the donation of land for the construction unoccupied buildings on its property to local impacted a number of employees and, therefore, of the Kingsport tennessee Regional Center for firemen and law enforcement officers so they the towns they call home. Advanced Manufacturing (RCAM), a facility dedi- can conduct training and search and rescue cated to technical training. the Kamloops Mill was exercises. the Ashdown Mill has sponsored a the communities where Domtar has operations awarded the 2008 BC exporter Sustainability Award successful school-based paper recycling initiative remain valued partners, and the company con- as one of British Columbia’s top 10 exporters. since 1996 in partnership with a local recycler. tinues to be a strong presence by providing the funds generated by the paper collection are good jobs and contributing significantly to the SOCIAL INVOLVEMENT used for school programs. municipal tax base. Some of its mills received the relationship between Domtar mills and their official recognition for their efforts in supporting communities goes much deeper than economic the local economy. stimulation. through a variety of annual activities and special events, the company’s employees are helping build enduring ties with a diverse range of stakeholders.


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    what are With Lynx® Opaque, what you see is what you get. But it’s also about what you don’t see. Because Lynx Opaque is one of the best in its class when it comes to opacity. So when the customer wants a few more beauty shots — or if the designer is into ink — you can be sure that Lynx Opaque can handle it. looking at


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    mills DOMTAR’S PULP AND PAPER

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