COPA

Market & Industry DataDecember 12th, 2012

Domtar Market & Industry Data

2

North American UFS Industry Data

• UFS demand decreased 4.3% in YTD Oct. 2012 vs. YTD Oct. 2011

• UFS mill inventory ended Sept. 2012 at 26 days of supply, same as Sept. 2011

• UFS operating rates were 89% MTD Oct. 2012 & 90% Oct. YTD

Source: PPPC

Domtar Market & Industry Data

UCF DEMAND

3

000’s tonsYTD Oct.-12 YTD Oct.-11 %

change

Uncoated woodfree

Operating rate (Oct. MTD: 89%) 90% 90%

Total UFS demand 8,189 8,559 -4.3%

Cut-size demand 3,760 3,890 -3.3%

Offset & Opaque demand 2,012 2,135 -5.8%Envelope demand 814 871 -6.5%

Forms Bond demand 617 654 -5.7%

Other UFS demand 988 1,010 -2.2%

Domtar Market & Industry Data

4

UFS Industry Demand

700,000

750,000

800,000

850,000

900,000

950,000

2010

2012

Oct. YTD demand is 4.3% below 2011

Source: PPPC

2011

Domtar Market & Industry Data

5

North American Cut-Size* Shipments

300,000

350,000

400,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

10 shipments 11 shipments 12 shipments

Source: PPPC

• Cut-size includes colors multipurpose

Domtar Market & Industry Data

6

N.A. UFS Share by Capacity - 2012

Source: RISI Capacity Report

Total Capacity* = 11,096,000 short tons

Domtar Market & Industry Data

7

10,50011,00011,50012,00012,50013,00013,50014,00014,50015,00015,500

2005 2006 2007 2008 2009 2010 2011 2012

N.A. UFS History of Capacity

• UFS capacity declined 6.2% in 2010, 2.4% in 2011, and -1.4% so far in 2012

‘000 of tons

-6.2%-2.4%

Source: PPPC

-6.0%

*Capacity numbers include the following: Mohawk’s, Wausau’s & Appleton closures, scheduled maintenance shutdowns, and scheduled UFS annual capacity of coated producers. Also added are the reopenings of Gorham & Gray’s Harbor paper

machines

-1.4%

Domtar Market & Industry Data

8

N.A. UFS Demand Forecast

in ’000 of tons

Source: PPPC/RISI

-3%-4%

-12%

-1%-1.0%

-12% -0% -1.0% -4% -4%

• %’s from past years may differ due to different calculation methologies (Imports, exports, ITB etc.)

4,000

6,000

8,000

10,000

12,000

14,000

2007 2008 2009 2010 2011 2012 2013

PPPC Forecast RISI Forecast

-4.0%

-3.5% -3.8% -2.8%0.1%-12.7%-7.6%-5.3%

-3.2%-3.8% -2.8%

Domtar Market & Industry Data

9

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

2004 2005 2006 2007 2008 2009 2010 2011 2012

Forms Bond

Copy

-5.5% in 2012

-4.8 % in 2013

In‘000 tons

Envelope

Forecast

-2.7% in 2012

-2.0% in 2013

Offset & Opaque

-5.7% in 2012

-3.8% in 2013

-6.8% in ’12

-3.8% in ‘13

Source: PPPC

UFS Demand Forecast by Grade

Domtar Market & Industry Data

10

Printing & Writing N.A.Operating Rate YTD 2012 vs. 2011(Operating rates %)

Source: PPPC

90%

93%

92%

91%

90%

93%

89%

94%

86%

87%

88%

89%

90%

91%

92%

93%

94%

95%

UCFS Unc. Mech CWF CM

Oct. 2011 Oct. 2012

Domtar Market & Industry Data

Distribution Channel – Market Share

Source: PPPC

Distribution Channel

2011 Tons

2010 % Market Share

2011 % Market Share

Merchants 869,000 25.2% 21.9%

OEM 232,000 5.5% 5.9%

Office Store – Retail 400,000 8.2% 10.1%

Office Store - Contract 1,774,000 46.8% 44.7%

Food/Drug/Mass 28,000 .7% .7%

Club Stores 17,000 .8% .4%

Wholesalers 329,000 7% 8.3%

Online/Direct 315,000 5.9% 8.0%

Total 3,965,000 100%

Merchants21.9%

OEM5.9%

Office Store – Retail10.1%

Office Store –Contract

44.7%

Food/Drug/Mass.7%

Club Stores.4%

Wholesalers8.3%

Online/Direct8%

Domtar Market & Industry Data

Brand – Market Share

Private Label59.2%

Mill Brand29.3%

OEM8.7%

All Others2.8%

Source: PPPC

Brand2011Tons

2010 % Market Share

2011 % Market Share

Mill Brand 1,163,000 30.5% 29.3%

OEM 344,000 9.2% 8.7%

Private Label 2,347,000 57.9% 59.2%

All Others 111,000 2.6% 2.8%

Total 3,965,000 100%