Domtar Inc. and UPM-Kymmente Corp. Sign Coating Technology and Know-How Transfer Agreement

Business Wire, March 17, 1997

MONTREAL/HELSINKI--(BUSINESS WIRE)--March 17, 1997--(ME;TSE;NYSE DTC) Domtar Inc., a leading Canadian paper company, has agreed to enter into a coating technology and know-how transfer agreement with UPM-Kymmene Corporation of Helsinki, Finland the largest European paper company. This agreement will allow both companies to explore areas of mutual interest and exchanges in technology and know-how.

"This agreement will strengthen our ability to further develop expertise and know-how in the manufacture of coated freesheet paper products," said Mr. Raymond Royer, Domtar's President and Chief Executive Officer. "In addition, this agreement will reinforce Domtar's commitment to emphasize value creation both for itself and its shareholders," Mr. Royer added.

Mr. Juha Niemela, UPM-Kymmene's President and Chief Executive Officer said that "This relationship with Domtar, a well-established North American paper company, will enable UPM-Kymmene to commercialize its coating technology expertise." Mr. Niemela furthermore noted that "This agreement would help UPM-Kymmene advance its knowledge of the North American business environment and fibre base."

A leading North American manufacturer and marketer of printing and writing papers, Domtar is also a significant Canadian producer of containerboard and corrugated containers and a major Eastern Canadian lumber producer.

The UPM-Kymmene Group is the largest forest industry company in Europe and one of the biggest in the world. In 1996, its sales were US$11.3 billion. The company has seven divisions producing magazine papers, fine papers, packaging, newsprint, lumber and plywood.

CONTACT: Domtar Inc.

Denis Couture, 514/ 848-5103

denis_couture@email.domtar.com

HTTP://WWW.DOMTAR.COM

or

UPM-Kymmene Corporation

Markuu Franssila, 358/204-15111

358/204-150308 (FAX)