Domtar (UFS)

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

(All financial information is in U.S. dollars, unless otherwise noted.)

MONTREAL, May 2, 2012 /PRNewswire/ - Domtar Corporation today announced that its Board of Directors has approved a 29% increase to its quarterly dividend (from $0.35 to $0.45 per share) on its common stock (NYSE: UFS) (TSX: UFS) as well as on the exchangeable shares of Domtar (Canada) Paper Inc. (TSX: UFX).

"The Board's decision to increase the dividend reflects our continued confidence in our ability to generate strong cash flows. Creating shareholder value and managing our capital effectively remains a priority and we intend to continue to assign the majority of our future free cash flow to our shareholders," said John D. Williams, President and Chief Executive Officer.

The Board of Directors declared the dividend payable on July 16, 2012 to stockholders of record as of the close of business on June 15, 2012.

The Company is holding its Annual Meeting of Stockholders today at 9:00 a.m. (ET). Investors and other interested parties are invited to listen to the live webcast at www.domtar.com.

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About Domtar

Domtar Corporation (NYSE: UFS) (TSX: UFS) designs, manufactures, markets and distributes a wide variety of fiber-based products including communication papers, specialty and packaging papers and adult incontinence products. The foundation of its business is a network of world class wood fiber converting assets that produce papergrade, fluff and specialty pulps. The majority of its pulp production is consumed internally to manufacture paper and consumer products. Domtar is the largest integrated marketer of uncoated freesheet paper in North America with recognized brands such as Cougar(®), Lynx(® )Opaque Ultra, Husky(®) Opaque Offset, First Choice(®) and Domtar EarthChoice(®). Domtar is also a leading marketer and producer of a complete line of incontinence care products marketed primarily under the Attends(®) brand name. Domtar owns and operates Ariva(TM), an extensive network of strategically located paper and printing supplies distribution facilities. In 2011, Domtar had sales of US$5.6 billion from nearly 50 countries. The Company employs approximately 9,100 people. To learn more, visit www.domtar.com.

Forward-Looking Statements

All statements in this press release that are not based on historical fact are "forward-looking statements." While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the captions "Forward-Looking Statements" and "Risk Factors" of the latest Annual Report on Form 10-K filed with the SEC as updated by the Company's latest Quarterly Report on Form 10-Q. Unless specifically required by law, we assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances.

SOURCE DOMTAR CORPORATION