MONTREAL, Nov. 4  - Domtar Corporation announced today that it will permanently shut down the paper machine and converting operations of its Dryden, Ontario mill. This will result in the permanent curtailment of Domtar's annual paper production capacity by approximately 151,000 short tons of uncoated freesheet paper and will affect approximately 195 employees. Dryden papermaking and converting operations are expected to cease by mid-November 2008.

"Given adverse economic conditions and the continued softening of demand for fine papers, we need to further reduce our production capacity," said Raymond Royer, President and Chief Executive Officer of Domtar. "The mill's relative cost position and the need to maintain a balance in Domtar's supply and demand system have made this difficult decision necessary. This announcement also reflects our strong commitment to our customers and other stakeholders to be the most efficient producer in North America. Dryden papermaking employees have made commendable efforts over the last several years in trying to meet these challenges and I want to thank them for their dedication," concluded Mr. Royer.

Dryden's pulp production and related forestland activities will remain in operation. Dryden has one pulp line with an annual production capacity of 319,000 air dry metric tonnes.

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