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Domtar Inaugurates Commercial Lignin Production

Plymouth Mill to produce bio-material with wide range of industrial applications as petro-chemical alternative - the first of its kind in over quarter century

TICKER SYMBOL (NYSE: UFS) (TSX: UFS)

MONTREAL, March 12, 2013 /PRNewswire/ - Domtar Corporation (NYSE: UFS) (TSX: UFS) today announced that it has successfully installed a commercial-scale lignin separation plant at its Plymouth, North Carolina mill, the first U.S. facility of its type in over 25 years.  The production of BioChoiceâ„¢ lignin began in February, with a targeted rate of 75 tons a day, destined for a wide range of industrial applications as a bio-based alternative to the use of petroleum and other fossil fuels.

The successful installation of commercial-scale lignin removal capacity at the Plymouth Mill is the culmination of a research and engineering project launched by Domtar in 2010.  This project was further boosted when the U.S. Department of Agriculture and the U.S. Department of Energy awarded the company a grant through the Biomass Research and Development Initiative. Domtar's lignin operation sets a new path for the industry and also marks the latest sustainability milestone for a company that has long been recognized as an industry leader in forest certification and environmental stewardship.

"Our vision is to be a global leader in fiber-based innovation," said Bruno Marcoccia, Domtar's director of research and development. "A big part of this is our focus on partnering with best-in class collaborators to develop new products and markets for a wide portfolio of initiatives, like BioChoice."

"The possibilities for making a real difference in terms of offering manufacturers a bio-based alternative to the use of petro-chemicals is truly exciting," said Hasan Jameel, a professor in North Carolina State University's Department of Forest Biomaterials. "This is a big win for sustainability on two counts - Domtar improves the efficiency of its pulp-making process, and at the same time the market gets a reliable, high-quality source of this underused material with so much potential."

A wide range of potential applications for BioChoice lignin exists, including fuels, resins and thermoplastics.

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