1. INTERNAL ONLY - DO NOT FORWARD OUTSIDE OF DOMTAR
4/8/2019
NA UFS Market Dynamics
January 2019

2. INTERNAL ONLY - DO NOT FORWARD OUTSIDE OF DOMTAR
4/8/2019
NA UFS Market Update
2018 demand dropped -0.5%, 2019 demand decline forecasted at 4.4%
2018 operating rates were 90%
2018 capacity reductions totaled 410,000, 5% of demand
2019 announced capacity reduction of 630,000 tons, 7.6% of demand
Imports began to increase late in 2018 but remain at post-trade case average
Increased pulp pricing, input costs of raw materials and transportation led to rising pulp and paper prices across the globe and remain elevated heading into 2019
Source: PPPC, RISI
Total UFS Market = 8.27 million tons (PPPC)

3. North American UFS Announced Capacity Reductions and Demand Trend
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4/8/2019
North American UFS Announced Capacity Reductions and Demand Trend
North American capacity reductions continue to outpace demand decline
Capacity Reductions (2018)
Date
UFS Reduction
% of Demand
Flambeau River Paper
Q1 2018
100,000
1.2%
GP Camas
Q2 2018
230,000
2.8%
Boise/PCA Wallula
Q3 2018
80,000 1%
GP Port Hudson
Q1 2019
630,000
7.6%
IP Riverdale (Selma)
H1 2020*
220,000
**2.8%
TOTAL
1,260,000
15.4%
*Conversion postponed from mid-2019 to H1 2020
Total UFS Market 2018/2019 = 8.27 million tons (PPPC)
PPPC – Global Demand UW CS. Nov 2018 and Jan 2019 Data
**Total Est. UFS Market 2020 = 7.9 million tons (PPPC)

4. INTERNAL ONLY - DO NOT FORWARD OUTSIDE OF DOMTAR
4/8/2019
Imports Overview
Imports increased in 2018 yet remain 8% of UFS demand
Trade Case
Source: PPPC, Import Genius

5. Pricing History: Copy Paper Adjusted for Inflation
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4/8/2019
Pricing History: Copy Paper Adjusted for Inflation
Source: RISI

6. Pricing History: Offset Rolls Adjusted for Inflation
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4/8/2019
Pricing History: Offset Rolls Adjusted for Inflation
Source: RISI

7. North American Market Pulp Price Trends
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4/8/2019
North American Market Pulp Price Trends
Pulp price increases have slowed but remain at elevated levels
Source: RISI

8. INTERNAL ONLY - DO NOT FORWARD OUTSIDE OF DOMTAR
4/8/2019
Trucking Update
Truck capacity has eased slightly but rates remain high
Source: DAT Solutions

9. INTERNAL ONLY - DO NOT FORWARD OUTSIDE OF DOMTAR
4/8/2019
Mill Inventories
Normal year-end slowdown allowed for the rebuild of mill inventories but at relatively low levels
Days of Supply
Source:PPPC

10. INTERNAL ONLY - DO NOT FORWARD OUTSIDE OF DOMTAR
4/8/2019
2019 Outlook
2019 market is expected to remain tight
Domtar is committed to being a reliable supplier
2018 Performance
95% on-time shipments
95% in-stock rate
Our joint success will require communication and collaboration – here’s what you can do to help
Accurate forecasting
Business growth expectations including acquisitions
Inventory needs including customer specific inventory turns
Timely appointments and carrier unloading
Sufficient planning for order lead times
Full and even truckloads where possible

11. Domtar Value Proposition
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4/8/2019
Domtar Value Proposition
LONG-TERM
COMMITTED
PARTNERSHIP
MOST RELIABLE
& ADAPTABLE
SUPPLY CHAIN
BROAD RANGE
OF BEST-IN-CLASS
PRODUCTS
PROTECT &
STRENGTHEN BRAND
REPUTATION
Strong core values
Committed to the Paper Business
Knowledgeable people
Personalized relationships
Security of supply
Modern, well maintained equipment
Vast North American network
Vertically integrated
Broad product bundle
Top-tier national & private brands
Quality products with consistent performance
Product Innovations via OEM relationships
Recognized leader in Sustainability
Help customers achieve sustainability goals
Protect customer’s brand