Montreal - Domtar Corporation announced today that it will permanently close its coated groundwood paper mill in Columbus, Mississippi. The Domtar coated groundwood paper mill has an annual production capacity of 238,000 tons of coated groundwood and 70,000 metric tons of thermo-mechanical 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.