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2007 Global Envelope Alliance Conference Richard L. Thomas Senior Vice President, Sales Domtar Paper Company, LLC June 4, 2007.

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Presentation on theme: "2007 Global Envelope Alliance Conference Richard L. Thomas Senior Vice President, Sales Domtar Paper Company, LLC June 4, 2007."— Presentation transcript:

1 2007 Global Envelope Alliance Conference Richard L. Thomas Senior Vice President, Sales Domtar Paper Company, LLC June 4, 2007

2 2 2006 World UFS Demand 8,086,000 3,455,000380,000 2,306,000 13,416,000 15,693,000

3 3 North American UFS Demand 12,502,000 914,000

4 4 North American UFS Producers 4,873,000 3,997,000 1,439,000 1,086,000 461K410K280K267K241K207K196K 669K Top 5 producers

5 5 U.S. UFS Major End-Use Applications Business Forms 13% Envelopes 12% Direct Mail 9% Commercial Printing 13% Magazines 3% Tablets 3% Books 4% Cut Size/Reprographics 42% Misc Converting 3%

6 6 North American Demand 1990-2006

7 7 UFS Demand vs GDP

8 8 North American Production 1990-2006

9 9 9

10 10 1903 Dominion Tar and Chemical Company is formed. The company is founded in England, with a plant in Nova Scotia, Canada. The company produces tar from coke, and manufactures and treats railroad ties. 1914The company’s headquarters is established in Montreal. 1929Dominion Tar becomes a public company, with shares traded on the Montreal and Toronto exchanges. 1961The company acquires Howard Smith Paper Mills, Canada’s largest paper manufacturer, as well as St. Lawrence Paper. 1965Dominion Tar changes its name to Domtar Ltd, to reflect the more diverse nature of its businesses. 1973Domtar acquires Bunton Reid, entering the distribution business 2001Domtar purchases the bulk of Georgia Pacific’s paper production facilities, including the world class Ashdown, Arkansas facility. 2007 Domtar merges its assets with the paper operations of Weyerhaeuser, to form North America’s largest uncoated freesheet producer. Domtar sells its interest in the Norampac linerboard joint venture, becoming a “pure play” bleached pulp and paper producer. History

11 11

12 12 The “New Domtar” Profile  Employees  14,000 Worldwide  Sales  $ 6.7 Billion  Locations  Head Office – Montreal, Quebec  Operations Center – Fort Mill, South Carolina

13 13 The “New Domtar” - Papers and Pulp  Largest UFS producer in North America  Fifteen pulp and paper mills and one single market pulp mill  5.2mm tons of capacity (uncoated and coated)  32 paper machines  16 Converting facilities  1.3mm tons of market pulp

14 14 Leading position in major segments Grades of Paper Domtar Rank Cut size1 Offset1 Opaque1 Forms1 LW Coated (mechanical/groundwood) 7 Colors & ITB3 LW Uncoated1 Trade book1 Coated Bristol4 TCW3 Envelope2 Technology Imaging2 Number One position in 6 of top 8 grades Source: Domtar volume and share estimates

15 15 Domtar: Sustainable Business Practices

16 16  Past  Customers satisfied with green product promise  Original efforts focused on recycling and pollution reduction  Basic compliance with regulations was acceptable  Sustainability was a fringe concept  Present  Customer expectations are higher – they want proof  Certification  Transparent communication required (sustainability report, web)  Current efforts focus on total environmental impact  Companies expected to go above and beyond basic compliance  Sustainability on top of corporate agendas Sustainability Trends

17 17  Customers are more aware:  92% state it is more important for companies to be socially responsible  85% state that the company’s degree of social commitment is an important factor in the buying decision  90% state that they might switch brands if they discovered that a company followed negative citizenship practices Sustainability Trends

18 18  Hurricane Katrina  “An Inconvenient Truth”  Energy Prices Sustainability Trends

19 19 Forest Certification Development  American Tree Farm System created in 1941  Originated idea of certifying and advertising a well-managed forest  Forest Stewardship Council (FSC) founded in 1993  Developed to prevent forest deterioration globally  Sustainable Forestry Initiative ® (SFI) founded in 1994  Created in U.S. to address public concerns about forest sustainability  Canadian Standards Association (CSA) program developed in 1996  SFI recognizes CSA as a functionally equivalent program

20 20 Forest Certification Development  Forest certification has gained wide acceptance in the past decade.  There are now approximately 385 million tons of certified forestlands in North America, up from nearly none in the early 1990s.

21 21 Domtar and Certification  Domtar has achieved ISO 14001 environmental certification for its forestry management practices in all forestland liscensed or owned by the company.  All mills and converting facilities are either ISO 14001 certified or certifiable.  All mills and converting facilities are third-party certified to the standards of either CSA (Canadian Standards Association), FSC (Forest Stewardship Council) or SFI ® (Sustainable Forestry Initiative)  Domtar has earned the support of well-respected environmental organizations, including Rainforest Alliance, WWF and ForestEthics.

22 22 "Wood is a crop. Forestry is tree farming. - Gofford Pinchot, First chief of the USDA Forest Services Tree Farming  The term "tree farming" was first used in the 1940s to introduce the public to sustainable forestry terminology in words they could easily understand  Farming implies continual stewardship and production of goods year after year Source: American Tree Farm System

23 23  The forest products industry plants 1.7 million trees per day, exceeding the number harvested  In the nation’s commercial forests, net annual growth exceeds harvests and losses to insects and disease by 49% annually Tree Farming

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