2007
Sustainable Growth Report
1•2•3
of the Triple
Bottom Line
Facts about Domtar’s economic,
environmental and social performance
Domtar
EarthChoice
North America’s leading line of
environmentally responsible papers
SUSTAINABILITY
The Power of Balance
A message from Raymond Royer, President and CEO
STATEMENT ON SUSTAINABLE GROWTH
LIFE CYCLE MANAGEMENT
MANAGING FORESTS RESPONSIBLY
WORKING TOGETHER FOR A GOOD CAUSE
A MESSAGE FROM
RAYMOND ROYER
PRESIDENT
AND CEO
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 1
SUSTAINABILITY
The power
of balance
As a pulp and paper company, Domtar sources its primary
raw material from the forest. Because we share this valuable
resource with many different stakeholders, we are continuously
striving to achieve the right balance between the economic,
environmental and social implications of our operations and
the interests of other forest users. This three-pronged vision
of the bottom line takes into account every dimension of
our activities.
We believe the key to reaching this balance
North American market. In a challenging
is making sustainability one of the
business where the battle for market share
cornerstones of our business strategy. We
is fierce, sustainability has proven to be
adopted this approach many years ago
both the right approach and an important
Stewardship Council (FSC) certification for
and apply it throughout our operations, as
competitive advantage for Domtar.
all of our mills, facilities and forests is one of
Our ongoing efforts to achieve Forest
the broadest in scope in the industry. We also
“We have placed sustainability at the heart
of our activities, where we have sought to
maintain financial discipline and to increase
efficiency so we can make the most out of
every process and resource.”
continue to develop our Domtar EarthChoice®
line of papers, which is FSC-certified and
supported by leading environmental groups
such as WWF-Canada and Rainforest Alliance.
We have placed sustainability at the heart
of our activities, where we have sought to
maintain financial discipline and to increase
efficiency so we can make the most out of
every process and resource. Part of achieving
this objective has been to transfer the
declared in our Board-approved Statement on
Sustainability at the core of
manufacturing of our strong-selling papers
Sustainable Growth.
our business
to our top-performing mills. This strategy has
As you will see in this 2007 Sustainable
also had positive environmental repercussions
sustainable growth within our industry and
Today, we are a recognized leader in
Growth Report, sustainability initiatives are
because the efficiency of these core mills has
a benchmark provider of environmentally
underway throughout Domtar’s operations
an impact on energy use, water consumption,
and socially responsible papers to the
and are helping to differentiate us from our
chemical use, fuel efficiency and fiber use.
industry peers.
2
Additional energy projects in the coming
forests that, through sound management,
years should help us further improve our
can continue to produce indefinitely. It is up to
culture of ethical business practices,
performance in this regard.
us and our peers to ensure this happens.
concern for people, and responsible forest
The fact is that natural resources are at the
By making sustainability one of the drivers
We will continue to build on our strong
management based on internationally-
core of Domtar’s business – and not just trees
of our business, we have never lost sight of our
recognized standards. This report echoes
either. Our pulp and paper mills use water
profit targets—we have simply rethought the
our commitment to the latter by meeting
from neighboring lakes and rivers, burn fossil
way we go about reaching them.
the standards of the Global Reporting
Initiative, a multi-stakeholder network
of experts on sustainability reporting.
“Our employees are our most
valuable asset.”
We have also identified our targets
throughout the document with this symbol for reference. domtar TARG ET
In the true spirit of sustainability, we are
confident that the investments we make
fuels and other non-renewable combustibles,
The responsibility of leadership
today in conserving the forest, optimizing
and release gases into the atmosphere. In
In 2007, Domtar became the largest integrated
the efficiency of our mills, nurturing
everything that we do, we strive not only to
manufacturer and marketer of uncoated
our employees and contributing to our
meet but to exceed the requirements set forth
freesheet in North America and the second
communities will help ensure the long-term
by all laws and regulations to protect the
largest in the world. We believe that with this
prosperity of our business in harmony with
environment and the communities in which
leadership has come increased responsibility
all forest stakeholders.
our employees work and live.
to inspire our industry and markets, through
Domtar’s supply chain also supports
example, to achieve the balance that lies at
our sustainability objectives. Our broad
the root of sustainable growth. Our goals
geographic footprint places us within
are ambitious and, although we are proud
a one-day truck drive from all of our major
of our achievements, there is still much work
markets. This means not only better customer
to be done. We are committed to reaching
service and lower transportation costs, but
these goals, no matter what the challenges,
also reductions in fuel consumption and
because continuous improvement is central
emissions, as well as more optimal use of our
to our beliefs.
fleet and drivers.
Our employees are our most valuable asset
and no ton of paper is worth risking their wellbeing. They are the focus of targeted programs
to ensure their ongoing development and
safety on the job.
Finally, our vision of the forest as a
renewable resource represents a competitive
Raymond Royer
advantage over other industries. Most natural
President and Chief Executive Officer
resources-based companies are dealing with
a finite amount of raw material. On the other
hand, companies in our sector depend on
W
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 3
THE 5
1
OF DOMTAR
WHO
Domtar Corporation is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America and the second
largest manufacturer in the world based on production capacity. We are also a manufacturer of papergrade, fluff and specialty pulp.
An independent, U.S.-incorporated, public holding company, Domtar has its Head Office in Montreal, Canada and employs nearly 13,000
people across North America. We directly own or manage forestlands totaling 28 million acres (11.3 million hectares).
2
WHAT
Domtar designs, manufactures, markets and distributes a wide range of business, commercial printing and publication as well as
converting and specialty papers. We have an annual production capacity of 4.6 million tons of uncoated freesheet, 238,000 tons
of coated groundwood and 1.2 million air dry metric tonnes of market pulp, net of external purchases. We also own and operate
the Domtar Distribution Group, an extensive network of strategically located paper distribution facilities, and produce lumber and
other specialty and industrial wood products.
3
WHERE
Domtar operates 15 pulp and paper mills, 19 converting, forms and distribution operations, 12 sawmills and one remanufacturing
facility, 88 distribution, supply and service facilities in 37 U.S. states and in seven Canadian provinces. Our Head Office is located in
Montreal, Canada and our Operations Center in Fort Mill, South Carolina.
4
WHEN
Domtar is always ready to serve the needs of our customers, with pulp and paper facilities strategically located across
North America, and a vast and efficient distribution system that stretches across the entire continent ensuring delivery of our
products to most of our major markets within 24 hours.
5
WHY
Domtar is North America’s largest integrated manufacturer and marketer of fine paper as well as a leader in environmentally and
sustainable practices. We will continually work to balance economic, environmental and social concerns as they relate to all of
our activities.
30
4
Foot
print
7
✪MONTREAL, QC
Head Office
395 de Maisonneuve Blvd. West
Montreal, QC H3A 1L6
18 24
●FORT MILL, SC
Operations Center
100 Kingsley Park Dr.
Fort Mill, SC 29715-6476
● Pulp and Paper Mills
● Converting, Forms Operations
● Distribution Facilities
● Sawmill Operations
●Converting, Forms and
●Distribution Operations
●Pulp & Paper Mills
1 ASHDOWN, AR
933,000 St of paper per year
86,000 ADMT of pulp
per year
2 COLUMBUS, MS
238,000 St of paper per year
3 DRYDEN, ON
197,000 ADMT of pulp
per year
4 ESPANOLA, ON
77,000 St of paper per year
114,000 ADMT of pulp
per year
5 HAWESVILLE, KY
634,000 St of paper per year
47,000 ADMT of pulp
per year
6 JOHNSONBURG, PA
374,000 St of paper per year
7 KAMLOOPS, BC
477,000 ADMT of pulp
per year
8 KINGSPORT, TN
425,000 St of paper per year
9 MARLBORO, SC
391,000 St of paper per year
10 NEKOOSA, WI
167,000 St of paper per year
11PLYMOUTH, NC
489,000 St of paper per year
153,000 ADMT of pulp
per year
12PORT HURON, MI
116,000 St of paper per year
13 ROTHSCHILD, WI
147,000 St of paper per year
14WINDSOR, QC
670,000 St of paper per year
33,000 ADMT of pulp
per year
15WOODLAND, ME
398,000 ADMT of pulp
per year
●Sawmills
16 Addison, IL
(Converting and
Distribution
Operations — Offsite)
21 GRIFFIN, GA
(Converting and
Distribution
Operations — Offsite)
13 ROTHSCHILD, WI
(Converting and
Distribution
Operations — Onsite)
1 ASHDOWN, AR
(Converting and
Distribution
Operations — Onsite)
22INDIANAPOLIS, IN
(Forms Manufacturing
Plant)
28 TATUM, SC
(Converting and
Distribution
Operations — Offsite)
17BROWNSVILLE, TN
(Converting and
Distribution
Operations — Offsite)
18 CERRITOS, CA
(Converting, Forms
and Distribution
Operations — Offsite)
19 DALLAS/FORT WORTH, TX
(Converting, Forms
and Distribution
Operations — Offsite)
20 DUBOIS, PA
(Converting and
Distribution
Operations — Offsite)
3 DRYDEN, ON
(Converting and
Distribution
Operations — Onsite)
23 LANGHORNE, PA
(Forms Manufacturing
Plant)
24 MIRA LOMA, CA
(Converting and
Distribution
Operations — Offsite)
11PLYMOUTH, NC
(Converting and
Distribution
Operations — Onsite)
25 OWENSBORO, KY
(Converting and
Distribution
Operations — Offsite)
26 RIDGEFIELDS, TN
(Converting and
Distribution
Operations — Offsite)
27 ROCK HILL, SC
(Forms Manufacturing
Plant)
29WASHINGTON COURT
HOUSE, OH
(Converting and
Distribution
Operations — Offsite)
14WINDSOR, QC
(Converting and
Distribution
Operations — Onsite)
30BIG RIVER, SK
250 Mfbm per year
(not operating)
31 EAR FALLS, ON
190 Mfbm per year
32 Gogama, ON
65 Mfbm per year
33 Lebel-sur-Quévillon, QC
140 Mfbm per year
(not operating)
34 MATAGAMI, QC
100 Mfbm per year
35 NAIRN CENTRE, ON
130 Mfbm per year
36 STE-MARIE, QC
70 Mfbm per year
37 SULLIVAN, QC
75 Mfbm per year
38 TIMMINS, ON
140 Mfbm per year
39VAL-D’OR, QC
160 Mfbm per year
40WHITE RIVER, ON
110 Mfbm per year
(not operating)
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 5
31
3
40
34
38
32
37
39
35
4
33
MONTREAL, QC, CANADA
)
36
14
13
10
15
12
16
6
20
23
22
29
25 5
26 8
11
17
27
21
1
2
9 28
FORT MILL, SC, USA
19
● Distribution, supply and service Facilities
All paper tonnage is expressed in short tons (St).
All pulp tonnage is expressed in
air dry metric tonnes (ADMT).
All wood capacities are expressed
in million foot board measure (MFBM).
Paper tonnage is expressed by mill capacity.
Pulp tonnage is expressed by mill trade pulp.
Notes:
Lebel-sur-Quévillon, Quebec is indefinitely idled.
Prince Albert, Saskatchewan is indefinitely idled.
Grand-Remous and Malartic sawmills
are indefinitely idled.
* Enterprise group is
involved in the sale
and distribution
of Domtar Papers,
notably continuous
forms, cut size
business papers as
well as digital papers,
converting rolls and
specialty products.
Enterprise Group *
Albuquerque, NM
Birmingham, AL
Boise, ID
Boston, MA
Buena Park, CA
Buffalo, NY
Calgary, AB
Cerritos, CA
Chandler, AZ
Charlotte, NC
Chattanooga, TN
Cincinnati, OH
Cleveland, OH
Columbus, OH
Denver, CO
Des Moines, IA
Duluth, GA
El Paso, TX
Evansville, IN
Fridley, MN
Fort Smith, AR
Fort Wayne, IN
Garland, TX
Harahan, LA
Hayward, CA
Hoboken, NJ
Houston, TX
Indianapolis, IN
Jackson, MS
Jacksonville, FL
Kansas City, KS
Kent, WA
Knoxville, TN
Lakeland, FL
Langhorne, PA
Las Vegas, NV
Lexington, KY
Little Rock, AR
Livonia, MI
Louisville, KY
Memphis, TN
Miami, FL
Milwaukee, WI
Montreal, QC
Nashville, TN
Oklahoma City, OK
Omaha, NE
Peoria, IL
Pittsburgh, PA
Richmond, VA
Rock Hill, SC
Salt Lake City, UT
San Antonio, TX
Shreveport, LA
St. Louis, MO
Syracuse, NY
Toronto, ON
Tulsa, OK
Vancouver, BC
Vancouver, WA
Wayland, MI
West Chicago, IL
Domtar Distribution Group
Albany, NY
Boston, MA
Buffalo, NY
Cincinnati, OH
Cleveland, OH
Columbus, OH
Covington, KY
Dallas / Fort Worth, TX
Dartmouth, NS
Dayton, OH
Fort Wayne, IN
Harrisburg, PA
Hartford, CT
Indianapolis, IN
Kalamazoo, MI
Lancaster, PA
London, ON
Montreal, QC
Mount Pearl, NL
New York, NY
Ottawa, ON
Philadelphia, PA
Quebec City, QC
Southport, CT
Toronto, ON
Washington, DC / Baltimore, MD
Regional Replenishment Centers (RRC)
Chicago, IL
Dallas, TX
Jacksonville, FL
Langhorne, PA
Los Angeles, CA
Plymouth, NC
Toronto, ON
Vancouver, WA
Winnipeg, MB
6
Mission
To anticipate and meet the ever-changing
needs of our customers, to provide our
shareholders with attractive returns and to
foster a dynamic and creative environment
in which shared human values and personal
commitment prevail.
DOMTAR’S
Values
Domtar’s values permeate every aspect
of its operations and are embraced by all
of its people.
•Commitment
•Creativity and innovation
•Entrepreneurship and initiative
•Judgment and discipline
•Leadership
•Perseverance and determination
•Professionalism and integrity
•Respect for others
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 7
WHAT DOMTAR’S MADE OF
Domtar has three business segments: Papers , Paper Merchants and Wood
PAPERS
PAPER
MERCHANTS
In uncoated freesheet, Domtar has 12 pulp
and paper mills in operation (nine in the
U.S. and three in Canada). We also have one
WOOD
Domtar’s wood business includes the
manufacturing, marketing and distribution
Domtar’s paper merchant business involves
of lumber and wood-based value-added
coated groundwood mill and two pulp mills.
the purchasing, warehousing, sale and
products, and the management of forest
Approximately 81% of our paper production
distribution of our products and those of
resources. We operate seven sawmills and one
capacity is located in the U.S.; the remaining
other manufacturers. Our paper merchants
remanufacturing facility. We also own five
19% is in Canada. Our paper manufacturing
operate in the U.S. and Canada under a
sawmills that are currently not in operation.
operations are supported by 16 converting and
single banner and umbrella name, the
In addition, Domtar has investments in three
distribution operations including a network
Domtar Distribution Group (a subsidiary
other wood products companies, one of
of 11 plants located offsite. Also, Domtar has
of Domtar). Ris Paper operates throughout
which is not in operation.
forms manufacturing operations at two of its
the Northeast, Mid-Atlantic and Midwest
Sales from the Wood segment represented
cut-size converting and distribution operations,
areas from 20 locations in the U.S., including
4% of Domtar’s business in 2007.
and three stand-alone forms manufacturing
16 distribution centers serving customers
operations.
in over 18 states. The Canadian business
In addition, we manufacture and sell pulp
operates as Buntin Reid in three locations
in excess of our internal requirements and
in Ontario; JBR/La Maison du Papier in two
purchase papergrade pulp from third parties,
locations in Quebec; and The Paper House
allowing us to optimize the logistics of our pulp
from two locations in Atlantic Canada.
capacity while reducing transportation costs
Sales are executed by Domtar’s sales force,
and environmental impacts, such as climate
based at branches strategically located in
change. Approximately 45% of Domtar’s trade
served markets. We distribute about 53% of
pulp production capacity is in the U.S., while
our paper sales from our own warehouse
the remaining 55% is located in Canada. Our net
distribution system and about 47% through
pulp position (the amount of pulp produced and mill-direct deliveries.
sold net of purchases from third parties), was
Sales from Domtar-owned merchants
approximately 1.1 million metric tonnes in 2007.
represented 14% of our business in 2007.
Paper and pulp sales represented 82% of
Domtar’s business in 2007.
Paper Products Offering in 2007
Categories
Business
Papers 43%
Commercial Printing
and Publication Papers 35%
Converting and
Specialty Papers 22%
Type
Uncoated Freesheet
Uncoated Freesheet
Coated Groundwood
Uncoated Freesheet
Copy
Offset
Colors
Index
Tag
Bristol
Opaques
Premium
opaques
Lightweight
Tradebook
No. 4 coated
No. 5 coated
Business converting
Flexible packaging
Abrasive papers
Decorative papers
Imaging papers
Labels
Medical disposables
Copy paper
Office
documents
Presentations
Commercial
printing
Direct mail
Pamphlets
Brochures
Stationery
Brochures
Annual
reports
Books
Catalogs
Catalogs
Magazines
Direct mail
Cards
Posters
Packaging
Forms & envelopes
Food & candy wrappings
Surgical gowns
Repositionable note pads
Security check papers
2,069
1,446
238
1,059
Grades
Applications
Annual Capacity*
Premium
imaging /
technology
papers
* In thousands of tons. Subject to change depending on market conditions and product offering.
statement on
sustainable growth
We manage our operations to benefit
our three key stakeholders: shareholders,
customers and employees.
To satisfy their long-term objectives,
we manage our financial, environmental
and social resources in a responsible
and sustainable manner.
Furthermore, we respect the viewpoints
and concerns of other members of
society and accommodate their needs
as appropriate to our operations.
Striving for excellence in corporate
governance and ethical standards, we
seek to continuously improve our methods
and practices.
We will periodically report on
our performance.
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 9
IN
THE
FOREST
AT
OUR
FACILITIES
IN
THE
MARKETPLACE
Responsible forest management
Fostering a safe workplace
We seek to meet and anticipate the ever-
Because we manufacture lumber, pulp and
Occupational health and safety is our primary
changing needs of our customers. We gather
paper, access to abundant, affordable and
objective at all of our facilities. We continually
and analyze information on market trends
secure sources of fiber is critical to our
strive to ensure safe working conditions,
and consumption behavior, as well as monitor
future. We share these resources with many
equipment and work sites. The cornerstone of
possible forms of product substitution or
other stakeholders, some of whom may hold
our approach rests on employee involvement
replacement. This data allows us to establish
different forest values. We strive to work
and accountability in identifying, preventing
specific yearly objectives regarding the
cooperatively with those who have a stake
and eliminating dangerous conditions and
development of our new products and
in the forest and to conserve the forest for
risks of injury or illness. We believe that close
services. We are also committed to fostering
future generations by contributing to the
cooperation among management, employees
a marketplace that values products that
development of ecologically meaningful
and where applicable, union representatives,
meet the standards of leading environmental
protected areas and by adopting sustainable
is essential to improving our performance.
groups; we support this commitment by
forest management practices. We are
We will conduct independent audits to verify
continually expanding, promoting and
committed to ensuring that our forest
compliance, reduce risk, and continually
commercializing products such as Domtar
management practices meet the standards
improve on established health and safety
EarthChoice®. We ensure the integrity of the
of internationally recognized, third-party
management systems.
manufacturing and distribution chain from
verified forest certification programs. Where
the forest to the market by certifying not only
appropriate, we favor certification according
Environmentally sound operations
our forest and manufacturing operations, but
to the standards of the Forest Stewardship
We conduct our activities in a manner that
also our distribution operations.
Council (FSC).
conserves resources. We strive to continually
reduce the environmental footprint of our
Responsible fiber procurement
operations by consuming less, emitting less
Not all of the fiber we consume originates
and generating less waste per unit of product
from lands we manage. When procuring from
output. We identify, evaluate and control
suppliers, we will strive to acquire fiber which
potential environmental risks and ensure that
originates only from forests that are managed
all of our facilities have effective contingency
in a sustainable manner. These lands should
plans. Finally, we subscribe to internationally
be third-party certified and respect the forest
recognized environmental management
values of other stakeholders. We will favor
systems with which independent third parties
suppliers who meet the standards of the FSC.
verify compliance.
10
Life Cycle Management:
WHAT GOES AROUND COMES AROUND
The Life Cycle Management approach recognizes that every stage of a product’s life cycle,
from extracting and processing raw materials to manufacturing, transportation and
distribution, use/reuse, recycling and waste management, has some environmental and/or socioeconomic impact.
The inclusiveness of this model reflects Domtar’s vision of sustainability, as outlined in our
Statement on Sustainable Growth. Just as we consider the effect of our operations from the
forest to our facilities and into the marketplace, Life Cycle Management demonstrates the
potential ripple effect of a single choice on the environmental, economic and social landscapes.
The diagram below illustrates the links between Domtar’s processes and products, as well as
their ties to the North American pulp and paper industry.
Did you know…
Certifying forestry
operations to third-party
standards, such as FSC,
is the best way to ensure
that the forest
will be productive
for generations
to come.
Did you know…
Did you know…
In North America the majority
of trees harvested are used
to make lumber and other
wood products such as houses,
furniture, fire logs, etc.
Dimensional lumber (2 � 4’s, etc.)
is actually a carbon sink, which
means that it stores atmospheric
carbon (the CO₂ that trees absorb)
into a stable product: wood.
SAWMILLS
RAW MATERIAL
(FOREST)
RECYCLING
DIMENSIONAL
LUMBER
PULP
AND
PAPER
MILLS
In 2007, 56% of the paper consumed in
America was recovered for recycling.*
END
OF LIFE
PRODUCT
USE
* Source: American Forest and
Paper Association.
Did you know…
Methane from
landfill sites is now
being recovered to
produce energy.
A typical pulp mill uses over 90% of the
wood it consumes: half is for making pulp,
the other half for process energy.
A typical pulp mill (Kraft) is 70% energy
self sufficient thanks to the use of
renewable energy.
Did you know…
Recycling one ton of paper to make
printing-grade paper generates 0.77 ton
of fiber and up to 0.9 ton of wet waste
material that must be disposed of.
Did you know…
If we were to rely exclusively on recycled fiber
to make paper, we would run out
of fiber in about 45 days.
TRANSPORTATION
Did you know…
Did you know…
Paper weights are
being reduced to use
less fiber for the
same end use.
PRINTING
AND
CONVERTING
Did you know…
All excess paper (cuttings,
over-runs, etc.) from printing
and converting operations
are recycled.
Efforts are currently under way
to minimize GHG emissions caused
by transportation by optimizing
loads and distances.
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 1 1
123
•
•
of the triple bottom line
Sustainability is a multi-dimensional concept. Posting
a solid economic performance is not enough to ensure
longevity in today’s discriminating marketplace,
nor is it enough to be environmentally responsible
or socially aware. You have to excel in all three
dimensions of sustainability.
For years, Domtar has refused to equate its success simply
with positive revenue generation. We have adopted a
three-pronged vision of the bottom line that takes into
account the economic and environmental as well as social
impacts of our activities. As 2007 came to a close, we felt
more confident than ever in our chosen course, poised
at the top of the industry, with close to 13,000 employees
and one of the most popular families of environmental
papers in North America.
In the following pages, you will learn more about Domtar
and how we continue to reinforce our leadership position
in the marketplace by finding the common ground
between our financial, environmental and social interests
and those of our stakeholders.
“In a challenging business where the battle
for market share is fierce, sustainability
has proven to be both the right approach
and an important competitive advantage
for Domtar.”
Raymond Royer, President and CEO
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 1 3
1
ECONOMIC
performance
Domtar’s business is focused on generating attractive returns for its stockholders
by generating free cash flow and reducing debt in an effort to strengthen its
financial position. Domtar’s aim is to achieve its financial goals while also
considering the impact of its operations on its many stakeholders.
A challenging business context
Financial highlights
Domtar is bigger, with more production
Year ended
December 30, 2007(1)
Twenty-six weeks ended
June 29, 2008
$5,947
$3,304
321
206
13
5
(63)
(34)
(1)
(3)
270
174
70
60
Cash flow provided from operating activities
$606
$140
capacity, a broader presence throughout
(In millions of dollars, unless otherwise noted)
North America and an expanded workforce
Sales
with the skills needed to face the challenges
that continue to beset the pulp and
paper industry.
2007 hurdles
A number of external factors made 2007 a
challenging year for Domtar.
• A stronger Canadian dollar compared to the
U.S. dollar;
• Lower demand for fine papers;
Operating income (loss) by segment
Papers
Paper Merchants
Wood
Corporate
Consolidated operating income
Net earnings
Additions to property, plant and equipment
116
65
• High price for energy, including fossil fuels;
Free cash flow(2)
490
75
• A decrease in the availability of wood chips
Net cash payments for interest
155
55
Net cash payments for income taxes
112
46
At December 30, 2007
At June 29, 2008
$7,726
$7,536
related to the slow U.S. housing market;
• The economic slowdown in the U.S.
Brightening outlook
Total assets
Towards the end of the year, Domtar benefited
Long-term debt, including current portion
2,230
2,141
from certain positive trends occurring in the
Net debt-to-total capitalization(2)
41.0%
39.7%
North American pulp and paper industry.
• Price increases for most key grades;
• Increased utilization rates resulting in less
downtime at our mills.
Domtar is optimistic that, through further
product differentiation and market
segmentation, we can bring added value to
our franchise and maintain our leadership
position in the North American market.
1. Including Domtar Inc. from March 7, 2007. For a description of the transaction, refer to our
Annual Report on Form 10-k.
2. Non-GAAP financial measure. Refer to the reconciliation at www.domtar.com.
Strategy & priorities
Domtar’s goal is to be recognized as the
supplier of choice for branded and private
branded paper products with consumers,
stationers, merchants, printers and
converters throughout North America. We
have implemented the following business
strategies to help us achieve this objective:
• Build customer loyalty and balance supply
with demand;
• Successfully integrate the combined businesses and optimize the operating platform;
• Increase depth of product offerings, including our line of environmentally and ethically
responsible EarthChoice® papers;
• Deliver on synergies;
• Focus on free cash flow generation and
maintain financial discipline; and
• Conduct operations in a sustainable way.
14
The right stuff
Return on $100 investment (in dollars)
Domtar Corporation began operations, on
March 7, 2007, following the transaction that
combined Domtar Inc. with Weyerhaeuser’s
Domtar Corporation
Peer Group
S&P 500 Materials
S&P 500
140
Fine Paper Business. This transformative
transaction led to the formation of what
130
is now a powerful new force in the North
American fine paper marketplace, an entity
that is far greater than the sum of its parts.
120
From the outset, we quickly identified
our competitive strengths and took full
advantage of them to execute the company’s
110
business strategy. Domtar considers its main
competitive strengths to be its:
100
Leading market position.
Domtar is the largest integrated manufacturer
90
and marketer of uncoated freesheet paper
in North America and the second largest in
the world based on production capacity. This
80
market-leading position provides us with key
competitive advantages, including economies
of scale, wider sales and marketing coverage,
70
03/06/2007
03/30/2007
06/29/2007
09/28/2007
12/31/2007
as well as a broad product offering.
Efficient and cost-competitive assets.
Domtar’s papermaking assets allow us to be a
low-cost manufacturer of high volume papers
and an efficient manufacturer of value-added
specialty papers.
High quality products with strong
shifting production of grades to lower cost
brand recognition.
machines, and continuing to apply best
Domtar enjoys a strong reputation for
practices throughout the organization.
Proximity to customers.
producing high quality paper products and
Domtar’s broad distribution and
markets some of the most recognized and
our business plan, several of these projects
manufacturing footprint brings us closer to
preferred papers in North America such as:
also contributed to the overall reduction of
our customers across North America. This
Cougar®, Lynx® and Husky®.
means enhanced service and reductions in
freight distance, response time and delivery
costs. Customer proximity also allows for
just-in-time delivery of high demand paper
products within 24 hours to most major North
American cities.
Experienced management team with proven
integration expertise.
Domtar’s management team has significant
experience and a record of success in the
North American pulp and paper industry,
including the handling of issues related to
Strong franchise with attractive
business integration. We also have a skilled
service solutions.
workforce that contributes actively to
Domtar sells paper to multiple market
improving our profitability.
segments through a variety of channels and
maintains a strong market presence through
Synergies
ownership of the Domtar Distribution Group
By the end of 2007, Domtar had achieved
and Enterprise Group. We plan to build on
$130 million (run-rate) in synergies following
these positions with centralized planning
the March 7, 2007 transaction. Over 650
capability and supply-chain management
integration projects have either been
solutions.
completed or are underway, including
streamlining the corporate structure,
eliminating overlap, merging supply chains,
In addition to enabling us to progress in
the environmental footprint of our operations.
This includes projects related to the merging
of supply chains and the reduction of product
transportation distances through the
optimization of our delivery process, among
others. We will be pursuing our efforts over
the coming year and we are confident of
achieving our ultimate target of $250 million
in synergies (run-rate) by the end of 2008.
domtar TARG ET
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 1 5
Stockholders and stock listings
Domtar’s stockholders are mostly institutions,
such as pension funds and mutual fund
managers, with 71% of the ownership being
in the U.S. We also have stockholders in
Canada, and in other countries such as the
U.K., Japan, Germany, Norway, The Netherlands,
Sweden, France, Austria, Finland, Belgium
and Switzerland.
Domtar Corporation’s common stock
is traded on the New York Stock Exchange
and the Toronto Stock Exchange under the
symbol “UFS.”
Domtar’s Stockholder Base
As at December 2007
U.S. | 71%
Canada | 24%
Other | 5%
For more information on
Domtar’s financial performance,
consult our 2007 Annual Report
DEVELOPING NEW PRODUCTS
WITH A HINT OF GREEN
Developing new and innovative products
This rigorous process was successfully
and customer solutions is key to ensuring
completed and the new char resistant paper
Domtar’s sustainability in the marketplace.
delivered to our customer’s satisfaction.
In 2007, we added over 12,000 tons of new
Informing customers
product capacity to our specialty portfolio,
Customer demand for new Domtar products is
bringing Domtar’s total annual specialty
often a direct result of the efforts of our sales
papers production capacity to 420,000 tons.
force and our environmental partners, WWF-
We also expanded our Domtar EarthChoice®
Canada and Rainforest Alliance, to inform and
line of environmentally and socially-
enlighten them on the environmental benefits
responsible papers through the addition
that come from using papers derived from
of popular brands such as Cougar®, Lynx®
sustainably managed forests. The success
Opaque and First Choice®.
of our FSC-certified Domtar EarthChoice®
Regardless of whether we are starting from
line strongly suggests that the message
scratch or bringing an old favorite up to new
is getting through. Indeed, we are getting
standards, Domtar looks at every angle to
more and more requests for our socially and
ensure that our product development falls in
environmentally responsible products, with
line with our commitment to sustainability.
customers even asking us to modify existing
Specialty papers
Balancing customer and environmental needs
products so that they can also be certified
under the FSC standard.
New product development is frequently
Growing Domtar EarthChoice®
customer driven and born from specific
The Domtar EarthChoice® line continued to
technical needs. Whenever possible, we try
expand and grow in reach during the last
to integrate environmental considerations
year, with the addition of some of the most
into the process. The following case
popular papers to the EarthChoice® family:
study shows how this can, and has been
Cougar and Lynx Opaque are now FSC-
accomplished at Domtar.
certified, and EarthChoice® Office Paper is
Case study
now available through major retailers, Staples
In collaboration with a client and outside
and Office Depot. We look forward to more
suppliers, Domtar successfully created a
papers joining the EarthChoice® family down
special wrapping paper that resists char in a
the road.
on Form 10-K in the “Investors”
high temperature cooking application. This
section of our Web site at
paper property is achieved by the use of
www.domtar.com
special additives in the papermaking process.
At the outset, a thorough screening
procedure was initiated to test the new
additives. This testing, which is conducted
automatically any time a new additive is
introduced into a Domtar product, not only
assesses the impacts of this new product on
the properties of the paper and the papermaking process, it minimizes and mitigates,
if needed, the potential health and safety
environmental impacts of its use. Only when
all of this is complete will a new additive be
approved for production trials.
domtar TARG ET
Learn more about our Domtar EarthChoice®
papers on page 16.
16
DOMTAR EARTHCHOICE® PAPERS:
EXPRESS HOW YOU FEEL ABOUT THE ENVIRONMENT
Domtar believes that most people want
commitment to responsible environmental
“Domtar is pleased to be a member of
WWF’s Global Forest & Trade Network.
A commitment to sustainable forest
management and responsible use of forest
to do the right thing when it comes to the
practices. And more and more of our
resources across our operations is one of the
environment. With our complete line of
customers are helping spread the word by
cornerstones of our business strategy,” said
socially and environmentally responsible
making their paper choice EarthChoice®.
Domtar EarthChoice® papers, we have made
it easy for our customers to express their
Guy Boucher, Vice-President, Sustainability.
“We have worked with WWF in the forests and
in the market, and this is but another step
www.domtarearthchoice.com
forward in our commitment to continuous
commitment to the environment.
improvement.”
In fact, Domtar has taken the guesswork
right out of “what is a responsible choice”,
by certifying our EarthChoice® products to
Forest Stewardship Council (FSC) standards.
To further strengthen the case, these papers
have earned the support of WWF-Canada and
been publicly endorsed by Rainforest Alliance.
The Domtar EarthChoice® family is ideally
suited to a wide range of projects such as
Domtar joins
the Global Forest &
Trade Network
In early 2008, Domtar joined WWF’s Global
Forest & Trade Network-North America
corporate identity materials, business and
(gftn.panda.org). The GFTN is WWF’s
office applications, digital printing, direct mail,
initiative to eliminate illegal logging and
transaction printing, converting, publishing
improve the management of valuable and
and unique specialty applications.
threatened forests. As a participant of GFTN-
The premier product in the EarthChoice®
North America, Domtar has committed to
line is Cougar®, a premium uncoated printing
responsible purchasing of forest products and
paper that has 10% post-consumer recycled
credible forest certification of its suppliers.
content. Other grades include Lynx® Opaque,
Domtar is working with WWF-Canada
EarthChoice’s brush with fame
Some heavy hitters in the music industry
HOTS®, EarthChoice® Office Paper, First
to pursue FSC certification for all Domtar-
Choice® along with many other publishing,
managed forestlands, identify important
to demonstrate their commitment to
converting and digital papers.
areas for protection on Domtar-managed
environmental preservation. In 2007, The
lands, support/encourage suppliers to pursue
Eagles printed the covers of their latest hit CD,
FSC certification and promote FSC-certified
Long Road Out of Eden, on one of Domtar’s
Domtar EarthChoice® papers are one of
Domtar’s strongest statements about our
have chosen Domtar EarthChoice® papers
environmentally responsible papers, such as
environmentally friendly papers. In the past,
our EarthChoice® product line and its flagship
other artists, such as Neil Young, have done
brand, Cougar®.
the same.
domtar TA RG ET
Product
Business & Office
Cougar®
Cougar® Digital
Lynx® Opaque
Lynx® Opaque Digital
HOTS®
EarthChoice® Office Paper
First Choice®
Microprint®
EarthChoice® Wove Envelope
Domtar Tradebook™
Domtar Lightweight Publishing Papers
Domtar Strategic Specialty Items
* Subject to availability
M
M
M
M
Commercial
Printing
M
M
M
M
M
Digital Printing
M
M
M
M
M
Publishing
M
M
M
M
Technical,
Specialty &
Converting
M
M
M
M
M
FSC-Certified
M
M
M
M
M
M
M
M
M*
M*
M*
M*
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 1 7
DOMTAR’S POSITION
ON FIBER SUPPLY
We encourage all of our suppliers to
operate with sustainable growth in mind.
Wherever possible, we favor fiber suppliers
who have FSC certification and, when that
is not possible, encourage them to meet
FSC’s controlled wood standards. Domtar
conducts systematic reviews of thirdparty fiber suppliers to ensure that these
standards are met.
We work on ensuring that all of our
operations comply with the tenets of our Fiber
Use and Sourcing Policy, which outlines our
position on the sourcing of virgin fiber. We aim
to eventually have all of our suppliers certified
to FSC or equivalent certification standards.
A DISTRIBUTION
SYSTEM CUSTOMERS
CAN RELY ON
To remain number one in our industry,
Domtar has to provide its customers not only
with superior products but also world-class
service. Our customers across North America
benefit from the expertise and commitment
to excellence of a distribution network whose
top priority is meeting their ever-changing
needs in the quickest and most cost-effective
way possible.
Domtar’s paper customers are located
primarily in North America and include paper
merchants, retail outlets, stationers, printers,
publishers, converters and end-users. Our 10
largest paper customers represented 46% of
total sales in dollars in 2007. Our pulp sales
are more or less evenly distributed between
North American and foreign customers.
Geographic Distribution of
Pulp and Paper Sales 2007 (in %)
Domtar’s distribution system is driven
by two customer-focused organizations.
PULP
The Domtar Distribution Group is a network
of 26 locations across the U.S. and Canada.
U.S. | 33%
It includes four regional paper distributors,
FSC-CERTIFIED LUMBER
a group dedicated to publishing solutions,
Canada | 4%
and a consumer and advertising group.
Mexico | 4%
The Enterprise Group is composed of five
Overseas | 59%
Domtar also offers lumber products certified
strategically located forms plants and
to the rigorous FSC standards. We can supply
more than 60 distribution centers across
every dimension and grade of wood directly
the continent.
from four of our sawmills – Timmins, Val-d’Or,
WHO BUYS DOMTAR’S
PULP AND PAPER?
PAPERS
Thanks to our broad geographic footprint,
Nairn Centre and Gogama. By choosing to
we are no more than a day’s truck drive
purchase FSC-certified lumber, customers
away from the majority of our customers.
are demonstrating their commitment to
This ensures not only faster service but
sustainability while providing their own
reduces overall fuel costs and greenhouse gas
clients with materials that can help them earn
emissions for our fleet.
U.S. | 84%
Canada | 9%
Other | 7%
“green points” under sustainable construction
programs like Leadership in Energy and
Environmental Design (LEED).
THE CUSTOMER : TOP OF THE SUPPLY CHAIN
Domtar’s Enterprise Resource Planning (ERP)
new collaborative approach include reduced
system is focused on one main goal: increasing
working capital through lower inventory,
the efficiency of the company’s supply chain
planned orders and scheduled deliveries.
to make us the most customer-responsive
supplier in the industry. Efficient procurement
processes, sound inventory management,
timely distribution – they all contribute to
getting Domtar’s customers what they want,
when they need it.
To further develop the close partnership
The increased efficiency gained through
our ERP directly contributes to the
sustainability of our business by reducing
waste on numerous levels. Our employees’
time is better utilized thanks to effective
processes. We reduce fuel consumption and
greenhouse gas emissions due to the wider
that is crucial to achieving this level of service,
geographic footprint of our distribution
we have created a Supply Chain Collaboration
network, which reduces product shipping
team to work with strategic customers. The
distances and makes the process more fuel
benefits these customers can expect from this
efficient. And the list goes on!
18
Commitment to quality
Top quality products and services are the
ISO 9000 Certifications
PULP AND PAPER MILLS
ISO 9000 (quality)
Ashdown
9002 (since 2003) and 9001 (since 2003)
Columbus
–
Quality Management System (QMS) in place
Dryden
9001 (since 2000)
at all facilities. Moreover, the QMS of all of
Espanola
9002 (since 1995) and 9001 (since 2003)
our Canadian mills, as well as those of our
Hawesville
–
Ashdown, Nekoosa, Plymouth, Port Huron and
Johnsonburg
–
Kamloops
9001 (since 1998)
Kingsport
–
Marlboro
–
Nekoosa
9002 (since 1995)
Plymouth
9001 (since 2006)
Port Huron
9001 (since 1994)
Rothschild
–
Windsor
9001 (since 1994)
Woodland
9001 (since 1994)
price of entry in a competitive environment
like the North American pulp and paper
industry. As a result, Domtar has a structured
Woodland mills, have been certified to the
internationally-recognized ISO 9000 standard
for quality.
OPPORTUNITIES AND RISKS RELATED TO CLIMATE CHANGE
Upcoming climate change legislation
reasons. Because it is too soon to estimate the
the definition of air pollutants under the Act.
may have a financial impact on Domtar’s
price of carbon credits down the road, putting
The ramifications of this decision is currently
operations, as it will likely create upwards
a monetary value on these allowances would
being assessed by EPA through the normal
pressure on the price of several commodities
be speculative at best.
rulemaking process but it is expected that
that are vital to our operations, such as fossil
Several U.S. states and Canadian provinces
the results of this examination may yield a
have recently joined forces to create the
rule similar to the “America’s Climate Security
Western Climate Initiative (WCI) in an effort to
Act”, also referred to as the Lieberman-Warner
(GHG) emissions, Domtar’s Canadian pulp
reduce GHG emissions in their jurisdictions in
Bill, which was defeated in Congress in mid-
and paper mills will soon be regulated, at
the apparent absence of national regulations
2008. This bill called for a drastic, step-wise
the federal level, under the “Regulatory
either in Canada or in the U.S. Domtar has
reduction in GHG emissions totalling 70%
Framework for Air Emissions”. This proposed
operations in several of these jurisdictions,
in 2050 compared to 2005 levels. Allowances
legislation will call for an 18% reduction in
including Maine, British Columbia, Quebec
will be given out to facilities that burn coal as
GHG emission intensity (kilos of GHG emitted
and Ontario, and is closely following the
an incentive to reduce their GHG emissions.
per tonne of production) by 2012, compared to
development of regional targets. Since
Although it is early to assess the full impact
2006 levels. Our analysis shows that we should
these targets have not yet been defined in
of any proposed GHG legislation, Domtar
be well below these reduction obligations
these regions, it is impossible to complete a
has identified several investment scenarios
by the end of the commitment period. This
financial risk assessment at this time.
that could allow it to address these climate
With its decision in the matter of
change challenges. Market conditions, along
fuels and process chemicals.
With respect to our own greenhouse gas
would put Domtar in a position to sell excess
allowances, preferably on an open, North
Massachusetts vs. EPA, the U.S. Supreme Court
with the terms of expected legislation, will be
American carbon market, to other regulated
rules that the Clean Air Act authorizes the US
the variables that will dictate which of these
corporations that cannot meet their reduction
Environmental Protection Agency (EPA) to
investment scenarios will be implemented,
targets for operational, financial or other
regulate greenhouse gases because they meet
based on a business case analysis.
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 1 9
A SOLID FOUNDATION OF GOOD GOVERNANCE
Communicating with the Board
and management
Who are Domtar’s stakeholders?
increasingly regulated and scrutinized
environment. Domtar’s business is firmly
Stockholders or other stakeholders can
fundamentally a people business. We
rooted in a strong culture of ethical behavior
contact any member of the Board at any time
understand that we are using an important
at every level of the organization. Our strong
during the year by writing to them care of
shared resource to create a product that is
principles and commitment to rigorous
the Corporate Secretary at Domtar’s Head
used daily by all of society. As a result, we
corporate governance are evidenced by the
Office in Montreal. The proper procedures for
recognize the importance of engaging with
comprehensive set of regulations and policies
this type of communication, including any
the various groups and individuals that are
that guide our everyday actions.
complaints or concerns regarding accounting
in some way impacted by our activities.
issues or other compliance matters, can be
Domtar’s stakeholders include shareholders,
found in Domtar’s Policy on Communications.
customers, employees, environmental non-
Today’s corporations operate in an
Board of Directors
The Board of Directors is the highest
governance body responsible for Domtar’s
activities. The Board has adopted a Code of
Business Conduct and written Corporate
Governance Guidelines that comply with
the listing standards of the New York
Stock Exchange (NYSE) and the Toronto
Stock Exchange. These Guidelines set
forth requirements relating to director
responsibilities, director qualification
standards, including director independence,
director compensation, director orientation
and continuing education, CEO succession
planning and assessment of the Board’s
performance, among other matters.
The Board has standing Audit, Nominating
Stockholders attending the Annual
communities, suppliers and First Nations.
address the members of the Board, as well as
We strive to engage in regular dialogue with
Senior Executives, during a question period
these stakeholders to understand what they
that follows the official proceedings. Issues
expect of us so that we can better respond
raised in the past have included mill closures,
to their expectations.
director accountability and capital allocation.
Employees who wish to report issues
or concerns in connection with a serious
Governance Policies and Reports
violation of Domtar’s Code of Business
2008 Proxy Statement
Conduct and Ethics may do so under the
Whistleblower Policy. Complainants may
communicate directly and in all confidence
with the Vice-President, Internal Audit, either
through a designated toll-free number or
in writing.
and Environmental, Health and Safety
Strong ethics is everyone’s business
Committees. Descriptions of the mandates of
Domtar’s reputation is shaped by the actions
these committees as well as the requirements
of every individual who works there. That
of committee members can be found in
is why we have adopted a Code of Business
Domtar’s 2008 Proxy Statement.
Conduct and Ethics that is applicable to all
employees at every level. This code aims to
members, 11 of which are independent,
ensure that existing laws and regulations are
including Chairman Harold H. Mackay.
not only respected but surpassed, and guide
Director independence is established in
the judgment of all those making business
compliance with the company’s internal
decisions. Domtar also has a number of
Director Independence Standard and the
internal policies that support the application
independence requirements of the Securities
of our Code of Business Conduct and Ethics.
and Exchange Commission and the NYSE. Mr.
Raymond Royer, President and Chief Executive
Officer, and Mr. Marvin Cooper, Executive VicePresident and Chief Operating Officer, are the
only members of the Board who do not hold
this status.
governmental organizations, governments,
Meeting of Stockholders are also invited to
and Corporate Governance, Human Resources
Domtar’s Board is made up of 13
At Domtar, we believe that paper is
See them all at www.domtar.com
under the corporate section
“Environmental accountability goes
hand in hand with a strong economic
performance. Domtar has systems and
processes in place to ensure that its
business remains sustainable – in every
sense of the word.”
Raymond Royer, President and CEO
2
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 2 1
ENVIRONMENTAL
RESPONSIBILITY
The fact is that natural resources are at the core of Domtar’s business – and not just
trees either. Our pulp and paper mills use water from neighboring lakes and rivers,
burn fossil fuels and other non-renewable combustibles, and release gases into
the atmosphere. In everything that we do, we strive to exceed the requirements set
forth by all laws and regulations to protect the environment and the communities in
which our employees work and live.
Managing forests responsibly
ISO 14001
their EMS, and we aim to achieve registration
Domtar knows that the forest is a renewable
Domtar’s responsible forest management
for the remainder of our facilities as well as
resource, one that must be carefully managed
practices are also grounded in a rigorous
for our offsite converting centers by the end
if it is to continue to thrive to the benefit of
Environmental Management System (EMS)
of 2009. The Windsor mill, which currently
all those who use it. And most of us do. Think
developed by the International Standards
adheres to the Responsible Care® program of
of the homes we live in, the paper products
Organization (ISO). Most of our forestland
the Canadian Chemical Producers Association
we use every day and the leisure activities we
operations are currently registered under the
(CCPA), is one of those undertaking the
enjoy. The forest has always been a source
ISO 14001 environmental standard.
ISO 14001 certification process in 2008.
of great wealth for humanity. Unfortunately,
it was not always treated with the respect
Several of Domtar’s pulp and paper mills
have already achieved this certification for
domtar TARG ET
it deserved.
Independent third-party certification
For Domtar, the use of responsible
management forestry practices is central
to our long-term viability. Indeed, without
healthy, sustainable forests, there is
Forest Stewarship Concil
( FSC )
fscus.org and fsccanada.org
no Domtar. That is why we have made
independent third-party auditing a core part
of our business and sustainability strategies.
We have certified all of our pulp and
paper mills, as well as the Domtar Distribution
The Forest Stewardship Council is an international, independent, not-for-profit organization that sets global standards
for responsible forestry. FSC standards address important economic, social and environmental concerns in the forest
products industry — and are widely accepted by over 85 leading environmental groups.
Group, under either the Forest Stewardship
Sustainable Forestry Initiative
( SFI )
sfiprogram.org
Council (FSC), the Sustainable Forestry
Initiative® (SFI) or the Canadian Standards
Association (CSA). Nearly half of the forestland
owned or directly licensed by Domtar is also
certified under either the FSC, SFI or CSA, and
most of our sawmills are FSC-certified.
The SFI is a fully-independent, non-profit forest and paper certification program that integrates the perpetual growing and
harvesting of trees with the preservation of wildlife, plants, soil, water and air quality. In order to be certified, participants
in the SFI program must undergo a thorough, third-party review of their operations by an accredited audit firm.
CSA
The Canadian Standards Association is a not-for-profit, membership-based organization serving business, industry,
government and consumers in Canada. CSA’s CAN/CSA Z809-02 SFM Standard is Canada’s National Standard for
Sustainable Forest Management. The Chain-of- Custody requirements were developed to link forests certified to CSA’s
SFM Standard to forest products and consumers.
ISO 14001
An Environmental Management System (EMS) meeting the requirements of ISO 14001:2004 is a management tool
enabling an organization of any size or type to 1) identify and control the environmental impact of its activities,
products or services, 2) improve its environmental performance continually, and 3) implement a systematic approach to
setting environmental objectives and targets, achieving these and demonstrating that they have been achieved.
22
Forest conservation, really? Really.
New York’s Adirondack Mountains to the
sawmills stay in compliance with applicable
Also, to ensure that our mills and
It’s a fact; Domtar has to harvest some trees to
Nature Conservancy, an environmental group
environmental regulations and implement
make its products. That said, we demonstrate
(http://www.nature.org/).
good environmental management practices,
our commitment to responsibly managing this
we perform independent audits on a regular
renewable resource by certifying our facilities
with WWF-Canada to collaborate in pursuing
basis. In 2007, three of our facilities were
to internationally-recognized environmental
FSC certification for all Domtar-managed
audited under the Domtar Corporate Audit
standards, and rigorously complying with,
forestlands in Canada, in promoting FSC-
Program, and audits are planned for seven
and even surpassing, all environmental
certified papers (like the Domtar EarthChoice®
facilities in 2008.
laws and regulations. We have also gone
line), and in identifying important areas for
a step further by participating in several
protection on Domtar-managed lands.
domtar TA R GE T
Domtar is proud of the way it operates
and how it has put mechanisms in place that
enable it to bring to market valuable products
derived from the forest while preserving
this rich natural resource for the benefit of
future generations.
important initiatives to preserve the Canadian
boreal forest.
As a founding member of the Canadian
In 2007, Domtar signed a new agreement
Domtar also endeavors to spread the forest
preservation message in the community. For
example, for over 50 years, the Dryden mill has
Boreal Leadership Council in 2003, Domtar
hosted a conservation course teaching local
joined forces with First Nations communities,
high school students the fundamentals of
environmental groups and other resource
resource conservation and management.
companies to help sustain the Canadian
boreal forest region. In addition, a few years
ago, we transferred 15 square miles (40 square
kilometers ) of land in the Eastern Townships
region of Quebec and sold 20,000 acres in
Selected
Environmental
Awards
• Ashdown – Arkansas Environmental
Federation Diamond Award for
environmental excellence
• Espanola – Environmental Preservation
Participants in the conservation course offered by the Dryden mill.
Award from Automation Services for its
Control Reclamation Program
Fiber procurement
• Hawesville – Environmental Protection
The virgin fiber we use to make our paper either comes from Domtar-managed forests or is
Agency (EPA) combined Heat &
purchased on the market.
Air Award
As stated in our Fiber Use and Sourcing Policy, we take an ecologically and socially responsible
approach to the management of our forestlands and pursue and maintain FSC certification in
preference to all others.
We have implemented a number of measures to verify that the fiber we purchase originates
from sustainably managed and legally harvested forests. An important measure is the
certification of our mills’ chain-of-custody (CoC) to internationally recognized standards. We also
• Kingsport – State Clean Air Award
• Marlboro – South Carolina
Environmental Excellence
Program Award
• Woodland – State of Maine Governor’s
give preference to certified suppliers and encourage them to develop and maintain relationships
Award for Pollution Prevention, State of
with the communities where they have activities.
Maine DEP Commissioner’s Award for
Domtar’s objective is to double the amount of FSC-certified fiber procured by 2011, as part of
an overall strategy to increase the procurement of third-party certified fiber.
domtar TA R GE T
improving water quality in the St. Croix
River, Corporate Environmental Award
for Pollution Prevention
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 2 3
2007 – Domtar North American Forests
Jurisdiction
Domtar–Owned
% Certified
Directly licensed
% Certified
Hectares
Acres
FSC
SFI
Hectares
Acres
FSC
CSA
Ontario
178,800
441,815
*
*
3,467,770
8,568,860
59%
41%
Quebec
164,114
405,526
99%
99%
4,563,881
11,277,350
27%
–
United States
6,830
16,877
100%
100%
–
–
–
–
Total
349,744
864,217
49%
49%
8,031,651
19,846,210
41%
8%
* Domtar–owned landbase not in operation. Saskatchewan landbase excluded as it is not in operation.
2007 – Delivery of wood from certified forests (green short tons)*
FSC
SFI
CSA
TOTAL
Pulp and paper mills
10.6%
7.2%
11.7%
29.6%
Sawmills
58.0%
0.0%
20.6%
58.4%
TOTAL DOMTAR
12.9%
6.6%
14.2%
32.1%
* The majority of certified wood originates from Domtar’s owned and directly licensed lands.
Certification by location (as of July 2008) – Pulp and paper mills
Pulp & paper mills
FSC
SFI
CSA
ISO 14001 (EMS)
Ashdown
CoC
Wood Procurement
–
Since 2003
Columbus
–
Wood Procurement
–
Target 2009
Dryden
CoC
–
Since 2003
Target 2009
Espanola
CoC
–
–
Since 1998
Hawesville
–
Wood Procurement
–
Target 2009
Johnsonburg
CoC
Wood Procurement
–
Target 2009
Kamloops
CoC
–
Since 2005
Since 2000
Kingsport
–
Wood Procurement
–
Target 2009
Marlboro
–
Wood Procurement
–
Target 2009
Nekoosa
CoC
Wood Procurement
–
Since 2004
Plymouth
–
Wood Procurement
–
Target 2009
Port Huron
CoC
–
–
Since 2003
Rothschild
CoC
Wood Procurement
–
Target 2009
Windsor
CoC
Wood Procurement, CoC
–
Target 2009*
Woodland
CoC
Wood Procurement
–
Since 2002
Converting centers
CoC
Fiber Sourcing
–
–
Paper Merchants
FSC
SFI
Buntin Reid
CoC
CoC
JBR/La maison du papier
CoC
CoC
The Paper House
CoC
CoC
Ris the paper house
CoC
CoC
* Presently certified under Responsible Care®
24
Certification by location (as of January 2008) – Forests/Sawmills
domtar–owned Forests
FSC
SFI
ISO 14001
Beauce
FM (2005)
FM (2007)
Since 2001
Estrie
FM (2005)
FM (2007)
Since 2001
Famine
–
–
–
Hearst
–
–
Since 2002
Sher-Don
FM (2006)
FM (2005)
Since 2007
Licensed Forests
FSC
SFI
ISO 14001
FM: Forest Management
CoC: Chain of Custody
SFL: Sustainable Forest License
CSA
Matagami
Target 2009
–
Since 2001
–
Pineland SFL
FM (2005)
–
Since 2001
–
Spanish SFL
FM (2006)
–
Since 2001
–
Trout Lake SFL
Target 2009
–
Since 2001
Since 2003
Val-d’Or
FM (2005)
–
Since 2001
–
White-River SFL
FM (2007)
–
Since 2001
–
Wabigoon SFL
Target 2008
–
Since 2001
Since 2003
Sawmills
FSC
Ear Falls
Target 2009
Elk Lake
–
Matagami
Target 2009
Nair Centre
CoC
Ste-Marie
N/A
Sullivan
CoC
Timmins
CoC
Val-d’Or
CoC
White River
–
SUSTAINABILITY POLICIES
• Statement on Sustainable Growth
• Environmental Policy
• Forest Policy
• Fiber Use and Sourcing Policy
See them all at www.domtar.com
Building lasting ties with environmental groups
Domtar has established collaborative relationships with some of its
important environmental stakeholders, believing that they are uniquely
placed to make sure our sustainability initiatives reflect the needs of all
concerned parties.
Domtar has collaborated with WWF for the past decade, working to
promote forest conservation and to advance environmentally preferable
paper products in the market. Because of Domtar’s commitment on the
ground and in the marketplace, the FSC-certified EarthChoice® line of
papers has earned WWF’s support. Domtar works with WWF-Canada
in helping conserve Canada’s boreal forest through responsible forest
management practices and the promotion of FSC-certified papers.
Domtar EarthChoice has also been endorsed by another of Domtar’s
valued partners, Rainforest Alliance (RA). To earn this endorsement,
Domtar has committed to achieve FSC certification for 100% of the
forests we manage and to increase the amount of FSC-certified fiber
from suppliers.
Since 2003, RA has been working with Domtar to encourage responsible
paper production and fiber sourcing. Through their SmartWood program,
RA has performed many FSC Forest Management certifications on Domtarmanaged forestlands, as well as FSC chain-of-custody certifications at our
mills, converting and distribution operations. We also work together to
provide environmental training for our employees, key customers and
supply chain partners.
Rainforest Alliance
(RA)
rainforest-alliance.org
WWF
(World Wildlife Fund)
wwf.ca
This respected environmental group works to protect ecosystems by transforming
business and land-use practices, as well as consumer behavior. Participation in
its programs requires meeting rigorous standards that conserve natural resources
and biodiversity.
WWF — the global conservation organization — works with partners to find sustainable
conservation solutions that benefit people and nature.
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 2 5
OTHER FACTS
about Domtar’s
environmental performance
Energy efficiency
By implementing energy efficiency
Since 2002, self-generated electricity at our
The average Domtar pulp and paper facility
programs at all of our facilities, and by using
facilities has increased by 14.8% (from 53.1%
draws about 79% of its thermal energy (energy
techniques such as thermal and water pinch
to 60.9% of its electricity requirements). This
required to make steam) from renewable fuels
analyses, Domtar is working diligently at
corresponds to a reduction in GHG emissions
such as biomass and spent cooking liquor. The
improving the sustainability of our operations
of about 447,000 tonnes annually, which is
remaining energy comes primarily from fossil
for all stakeholders. Some of our mills, such as
equal to the emissions of 90,000 automobiles
fuels (natural gas, fuel oil, coal). More and
Ashdown and Espanola, have used the process
over the period of a year.
more, facilities are becoming less dependent
several times to readjust and reinforce their
on the electrical grid by producing electricity
efforts and their energy reduction targets.
from steam, a process called cogeneration.
The advantage of using this type of
By making paper using more renewable
energy, and less energy overall, Domtar’s
• Since 2002, Domtar has been able to reduce
the use of fossil fuels, for each tonne of
product made, by more than 21%, and our
GHG emissions intensity (emissions per unit
process is that it is extremely beneficial to
mills will also use less water in their
the environment. The great majority of utility
processes and less fossil fuels, while better
companies in North America rely heavily on
utilizing wood fiber, which is a precious
fossil fuels to generate electricity. By using the
resource. The result: a paper that is both less
energy at our mills has decreased slightly
renewable energy produced on site to make
expensive to manufacture and friendlier
(−0.6%). But with the more prominent use of
electricity, Domtar helps significantly reduce
to the environment. Because parameters
renewable energy to generate electricity, we
emissions of greenhouse gases (GHG) that are
such as water use and GHG are so closely
feel with these encouraging results that we
not directly related to its processes.
related to energy use, Domtar has preferred
are on the right track and are continuing our
to set aggressive energy reduction targets
efforts to make our facilities more energy
for its facilities. In doing so, our mills will
efficient and less dependent on fossil fuels.
be more environmentally sound as well as
economically viable.
of production) by 20.2%.
• During that period, the overall use of
• Total direct GHG emissions decreased 21.6%
over the same period (2002-2007), or over
663,900 tonnes, the equivalent of taking over
133,000 cars off the road.
The results of this program from 2002 to 2007
Total energy use
−0.6%
Use of fossil fuels
−21.3%
Self-generated electricity
+14.8%
Total direct GHG emissions
−21.6%
GHG intensity
−20.2%
26
Use of Thermal Energy–2002 to 2007 (GJ/tonne)
Change in thermal energy use since 2002
The energy consumption data
Renewable Energy > 9.2% increase
Non-Renewable Energy > 21.3% decrease
Total Energy > 0.6% decrease
in this Report has been verified
2002
2003
2004
2005
2006
79.3%
77.9%
20.0
75.6%
accurate.
25.0
75.1%
mills) and has been found to be
74.2%
and Golder Associates (Canadian
30.0
73.4%
by URS Corporation (U.S. mills)
15.0
10.0
Renewable Energy
5.0
Non-Renewable Energy
0.0
2007
Evolution of GHG Emissions from Continuing Operations–1990 to 2007
( Tonnes of CO 2 eq)
EMISSIONS
800
3,500,000
700
3,000,000
600
2,500,000
500
2,000,000
400
13.6% below Kyoto in 2007
GHG
4,000,000
1,500,000
1,000,000
Total GHG Emissions
GHG Emissions Intensity
Kyoto Commitment (Due in 2012)
500,000
300
200
100
0
0
1990
2002
2003
2004
2005
2006
2007
Highlights:
Success stories:
• Since 2002, Domtar pulp and paper mills
• Hawesville, Kentucky: The heart of a Kraft pulp mill is its chemical recovery process. One
have reduced their GHG emissions by 21.6%
stage of the chemical recovery process involves recovery of lime in a rotary kiln. In Hawesville,
and their GHG intensity by over 20%.
Kentucky, Domtar provided operators with a kiln burner management system with a
• In 2007, Domtar achieved more than three
times what was required under the terms of
the Kyoto Protocol (6% reduction in Canada,
programmable logic control (PLC) system, which improves energy efficiency by lowering
primary air requirements to maximize fuel usage efficiency.
• Kingsport, Tennessee: A coal-fired boiler was replaced with a state-of-the-art biomass boiler,
7% in the United States) and five years early
significantly reducing the mill’s use of fossil fuels for steam generation and reducing the mill’s
(the Kyoto Protocol target year is 2012).
GHG emissions by 67%.
• Various mills: Optimization of the use of renewable fuels (recovery boilers, biomass boilers)
by improvements to combustion equipment to improve efficiencies. Numerous projects have
been identified at various mills and are already underway.
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 2 7
74.5
74.5
74.5
77.2
WATER
77.2
77.2
78.5
74.7
74.7
74.7
76.5
74.6
74.6
74.6
75.075.075.0
76.5
Specific Water Consumption (m3/tonne)
76.5
PULP AND PAPER MILLS
78.5
78.5
80.080.080.0
CONSUMPTION
70.070.070.0
80.0
200320032003
200420042004
200520052005
200720072007
74.5
74.6
74.7
76.5
75.0
200620062006
77.2
78.5
200220022002
70.0
2007
4.29
2.93
Water consumption reduction efforts are
linked with Domtar’s Energy Program.
Some of Domtar’s mills, such as Windsor,
Hawesville and Johnsonburg, are among
the lowest industrial water users in North
America, based on independent, third-party
benchmarking studies.
All of Domtar’s pulp and paper mills are
presently recording biological oxygen demand
(BOD), total suspended solids (TSS) and
adsorbable organic halides (AOX) levels well
below allowable limits. Note that limits are
0.42
0.24
0.19
0.18
0.24
0.19
0.24
Kamloops
Windsor
Plymouth
Dryden
Kamloops
Windsor
0.19
0.18
0.18
0.18
0.18
0.16
Windsor
Plymouth
Espanola
0.18
0.16
0.13
Espanola
Port Edwards/Nekoosa
Johnsonburg
0.16
0.13
0.13
0.12
Marlboro
Ashdown
Woodland
0.42
Dryden
Port Edwards/Nekoosa
Johnsonburg
Marlboro
0.13
0.12
0.06
Ashdown
Woodland
Kingsport
0.41
0.12
0.06
0.04
Woodland
Kingsport
Hawesville
Kamloops
0.06
0.04
0.02
0.04
0.02
Kingsport
Hawesville
Rothschild
0.02
Johnsonburg
Marlboro
Ashdown
Plymouth
Espanola
Port Edwards/Nekoosa
0.24
0.19
0.18
Espanola
Hawesville
Rothschild
0.18
Port Edwards/Nekoosa
Rothschild
0.16
0.13
Marlboro
Espanola
0.13
Ashdown
Espanola
Windsor
Espanola
Windsor
Dryden
0.12
Woodland
Windsor
Dryden
Port Edwards/Nekoosa
0.06
Kingsport
Dryden
Port Edwards/Nekoosa
Kingsport
0.04
0.30
Hawesville
0.40
Port Edwards/Nekoosa
Kingsport
Rothschild
Kingsport
Rothschild
Kamloops
Rothschild
Kamloops
Ashdown
0.50
0.02
Windsor
Plymouth
Johnsonburg
Espanola
Dryden
Windsor
Port Edwards/Nekoosa
Kingsport
Rothschild
Ashdown
Kamloops
Hawesville
Woodland
Plymouth
Marlboro
Johnsonburg
years at about 76 m3 per tonne produced.
Success story:
0.41
0.41
3.89
2.93
2.83
2.41
2.30
1.99
1.99
1.69
1.45
1.69
1.45
1.30
1.45
1.30
1.28
1.28
0.801.15
2.30
1.99
1.69
Kamloops
Ashdown
Hawesville
2.30 Port Huron
1.99
Espanola
1.69
Espanola
Kamloops
1.45
PortDryden
Huron
1.15Port Edwards/Nekoosa
Kamloops
Dryden
Port Edwards/Nekoosa
1.28
Espanola
Kamloops
Dryden
1.30
0.10 0.10 0.10
to be met: 0.48 kg/tonne
0.00 0.00 0.00
0.00
Water consumption has been stable in recent
specific to each mill.
2.93
2.83
2.62
Strictest regulation
0.60
0.10
Port Huron
Espanola
Kamloops
Dryden
Port Edwards/Nekoosa
Port Huron
Ashdown
Plymouth
Woodland
Marlboro
Hawesville
Johnsonburg
Kingsport
Rothschild
0.30 0.30 0.30
2007 Environmental Performance–
Water (AOX–Adsorbable
Organic Halides)
0.20 0.20 0.20
0.20
0.00
Highlights:
0.40 0.40 0.40
Rothschild
1.00
0.80
2.00
Port Edwards/Nekoosa
Port
Huron
Ashdown
Port
Huron
Ashdown
Plymouth
Ashdown
Plymouth
Woodland
Plymouth
Woodland
Marlboro
Woodland
Marlboro
Hawesville
Windsor
Kingsport
Windsor
2.00
Rothschild
Kingsport
Windsor
2.25
Johnsonburg
Rothschild
Kingsport
2.29
Hawesville
Johnsonburg
Rothschild
2.42
Marlboro
Hawesville
Johnsonburg
1.47
1.41
3.00
0.50 0.50 0.50
PU L P AND PAPER M IL L S
to be met: 8.4 kg/tonne
0.00 0.00 0.00
4.00
Strictest
Strictest
regulation
Strictest
regulation
regulation
0.60 0.60 0.60
to be to
met:
be0.48
to
met:
bekg/tonne
0.48
met:kg/tonne
0.48 kg/tonne
(kg/tonne)
2.41 Marlboro
Port Huron
2.62
Johnsonburg
Marlboro
Port
Huron
2.83
Plymouth
Johnsonburg
Marlboro
2.93
Woodland
Plymouth
Johnsonburg
3.89
Hawesville
Woodland
Plymouth
4.29
Ashdown
Hawesville
Woodland
5.00
1.38
1.26
1.24
1.17
1.15
0.801.15
1.00 1.00 1.00
Strictest regulation
to be met: 4.1 kg/tonne
0.00 0.00 0.00
1.00
0.80
(kg/tonne)
0.50 0.50 0.50
1.30
1.28
1.15
1.47
1.47
1.41
1.47
1.41
1.38
1.41
1.38
1.26
1.38
1.26
1.24
1.26
1.24
1.17
1.24
1.17
1.15
1.17
1.15
1.00
2007 Environmental Performance–
2.00 2.00 2.00
Water (TSS–Total Suspended
Solids)
2.98
Strictest regulation
1.15
0.64 1.00
0.64
0.64 1.00
1.50 1.50 1.50
vironmental Performance–
BOD–Biological1.00
Oxygen
Demand)
1.00 1.00
P ULP A N D P A P ER MILLS 3.00 3.00 3.00
2.83
2.62
2.41
4.00 4.00 4.00
2.00 2.00 2.00
D PAPER MI L L S
3.894.29
Strictest
Strictest
regulation
Strictest
regulation
regulation
5.00 5.00 5.00
to be to
met:
be8.4
to
met:
be
kg/tonne
8.4
met:
kg/tonne
8.4 kg/tonne
2.62
2.41
2.30
2.29
2.002.25
2.00
2.50 2.50 2.50
2.002.25
Strictest
Strictest
regulation
Strictest
regulation
regulation
3.00 3.00 3.00
to be to
met:
be4.1
to
met:
be
kg/tonne
4.1
met:
kg/tonne
4.1 kg/tonne
3.894.29
(kg/tonne)
(kg/tonne)
(kg/tonne)
2.98
(kg/tonne)
(kg/tonne)
(kg/tonne)
2.98
(kg/tonne)
(kg/tonne)
(kg/tonne)
2.42
2007
2007
Environmental
2007
Environmental
Environmental
Performance–
Performance–
Performance–
Water
Water
(AOX–Adsorbable
Water
(AOX–Adsorbable
(AOX–Adsorbable
Organic
Organic
Organic
Halides)
Halides)
Halides)
2.98
PU LPU
P AND
LPU
P AND
LPAPER
P AND
PAPER
M
PAPER
IL LMSIL LMSILLS
2007
2007
Environmental
2007
Environmental
Environmental
Performance–
Performance–
Performance–
Water
Water
(TSS–Total
Water
(TSS–Total
(TSS–Total
Suspended
Suspended
Suspended
Solids)
Solids)
Solids)
2.42
2.29
P ULP
P UL
A ND
PU
P AND
LPAPER
P AND
PAPER
M
PAPER
IL LMSIL LMSIL L S
2007
2007
Environmental
2007
Environmental
Environmental
Performance–
Performance–
Performance–
Water
Water
(BOD–Biological
Water
(BOD–Biological
(BOD–Biological
Oxygen
Oxygen
Oxygen
Demand)
Demand)
Demand)
2.42
2.29
2.25
P ULPU
P AND
LP
PUAND
LP
PAPE
AND
PAPE
R MI
PAPE
RLLS
MIRLLS
MILLS
0.42
2006
0.42
2005
• Columbus, Mississippi: The Columbus mill was among the first U.S. mills to successfully
manufacture coated groundwood paper using alkaline paper chemistry. In an alkaline
environment, the fiber refining process is more energy efficient. The chemistry change also
produces an effluent that is cleaner (with less organic matter) from the alkaline sizing system,
compared to the former acid paper chemistry.
Dryden
2004
0.41
2003
Dryden
Kamloops
2002
2.48
0.10 0.100.10
0.08 2.48
2.54
2.54
0.08 2.48
0.08
2.24
2.54
0.08
2.24
0.082.242.47
2.47
0.08 2.47
2.09
0.072.09
2.58
0.07 2.09 2.58
0.12
2.26
2.58
2.26
2.740.12
PULP AND PAPER MILLS
0.08 0.080.08
0.07
2003-2007 Environmental Performance–Air (NOx, SO 2 , TRS)
1.50 1.501.50
(kg/tonne)
(Kg/Tonne)1.00 1.001.00
NOx (Kg/Tonne)
NOx NOx
(Kg/Tonne)
EMISSIONS
SO2 (Kg/Tonne)0.50 0.500.50
SO2 (Kg/Tonne)
SO2 (Kg/Tonne)
0.06 0.060.06
0.04 0.040.04
3.50
0.14
0.13
0.02 0.020.02
2.48
0.08
0.08
2.24
0.08
2.09
1.50
0.10
2.54
200720072007
0.07
2.00
200620062006
2.47
200520052005
2.58
0.12
200420042004
0.00 0.000.00
2.26
2.50
2003
20032003
0.12
2.81
0.00 0.000.00
2.74
3.00
0.06
NOx (Kg/Tonne)
1.00
0.04
SO2 (Kg/Tonne)
0.50
0.02
TRS (Kg/Tonne)
0.00
0.00
2004
2005
2006
2007
5.00 5.00 5.00
installation of High Volume – Low
Success stories:
• Johnsonburg, Pennsylvania:
• Hawesville, Kentucky:
In May 2008, in cooperation with the U.S.
and the Miami University Paper Science
trading program aimed at reducing the
and Chemical Engineering Department
impact of large electricity generators on
the Hawesville mill participated in the
regional air quality in the U.S. Sophisticated
evaluation of the use of catalyst enhanced
facilities have increased in the past few
combustion controls were installed on its
ozone in the destruction of odorous gases
years. This is directly attributable to the
power boilers, resulting in a 40% reduction
produced by the manufacture of wood pulp.
increase in the price of energy and fuel
in NOx emissions.
This research has the potential to replace
• Sulfur dioxide (SO₂ ) emissions at Domtar
in North America. We occasionally had to
increase our use of lower grade fossil fuels,
such as coal and fuel oil. These higher sulfurcontaining fuels naturally produce higher
• Kingsport, Tennessee:
The Kingsport mill has the only sulfur-free
pulping process in the United States. This
existing capital-intensive technologies with
much lower cost “drop in unit” technology.
Espanola
Plymouth
Dryden
Kamloops
Hawesville
Windsor
Ashdown
Woodland
Kraft pulping process, which contains sulfur.
NOx regulations as part of a federal NOx
Protection Agency’s Cluster Rules.
0.169
0.348
0.014
Johnsonburg
of equivalent quality to mills that employ a
EPA Office of Research and Development
meet the requirements of U.S. Environmental
0.167
Port Edwards/Nekoosa
Plymouth
Espanola
Port Edwards/Nekoosa
0.159
Espanola
Port Edwards/Nekoosa
Dryden
Plymouth
Espanola
0.049
0.045
0.029
0.022
0.008
providing Domtar customers with a product
Port Edwards/Nekoosa
fuel logistically and financially unviable.
Marlboro
provider, making the purchase of this cleaner
Port Huron
to operate virtually
odor-free while still
0.000
Ashdown
Woodland
Dryden
Espanola
Kamloops
are hundreds of miles from a natural gas
0.018
2.04
1.40
almost in the
center of the city of Kingsport,
0.050
The Johnsonburg mill is subject to stringent
Concentration (HVLC) collection systems to
0.169
0.167
0.169
0.159
0.167
0.169
0.159
0.167
0.159
0.045
0.049
0.049
Kamloops
Dryden
Plymouth
Hawesville
Kamloops
Dryden
Windsor
Hawesville
Kamloops
Ashdown
Windsor
Hawesville
Woodland
Ashdown
Windsor
Johnsonburg
Woodland
Ashdown
0.029
0.045
0.049
0.022
0.029
0.045
0.018
0.022
0.029
0.014
0.018
0.022
0.008
0.014
0.018
0.250
0.200
Port Edwards/Nekoosa
0.37
0.41
0.23
0.18
Kingsport
0.14
Hawesville
Johnsonburg
0.06
Marlboro
0.02
Rothschild
0.01
Windsor
Port Edwards/Nekoosa
Ashdown
• The TRS reduction trend is due to the
0.350
0.300
0.100 the facility, which is located
process allows
fuel sources.
0.00 For example, some of our mills
Plymouth
Rothschild
Port Huron
Kamloops
Woodland
Johnsonburg
Kingsport
Marlboro
Dryden
Windsor
Hawesville
Espanola
Columbus
Columbus
0.2
2.00
1.25
also due to the mills’ proximity to optimal
0.52
levels of SO2 during combustion. This is
to boiler optimization projects.
(kg/tonne)
0.150
Highlights:
• The reduction trend in NOx emissions is due
Marlboro
Johnsonburg
8.00
• Sulfur1.00
dioxide (SO₂ ), nitrogen oxides (NOx)
and Total
0.00 Reduced Sulfur (TRS) emissions at
0.008
0.014
12.30
10.00
4.00
2.00
all our mills are within prescribed limits.
0.008
Marlboro 25.14
2.04
0.000 0.000 0.000
2007 Environmental Performance–
Air (TRS–Total Reduced Sulfur)
Marlboro
Johnsonburg
Woodland
4.67
4.67
0.050 0.050 0.050
2.04
1.40
(kg/tonne)
6.00
3.00
PU L P AND PAPER M IL L S
Port Edwards/Nekoosa
4.67
4.00
0.150 0.150 0.150
0.100 0.100 0.100
Windsor
Columbus
Marlboro
Windsor
Columbus
Rothschild
Marlboro
Windsor
Hawesville
Rothschild
Marlboro
Kingsport
Hawesville
Rothschild
Johnsonburg
Kingsport
Hawesville
Kamloops
Johnsonburg
Kingsport
Espanola
Kamloops
Johnsonburg
Dryden
Espanola
Kamloops
Woodland
Dryden
Espanola
Ashdown
Woodland
Dryden
Plymouth
Ashdown
Woodland
Port Huron
Plymouth
Ashdown
Port Edwards/Nekoosa
Port
Huron
Plymouth
6.00
5.00
0.200 0.200 0.200
2007 Environmental Performance–
Air (SO2–Sulfur Dioxides)
Port Edwards/Nekoosa
Port Huron
5.68 0.01
Columbus
0.00 0.00 0.00
5.04
0.2
2.00 2.00 2.00
(kg/tonne)
P ULP AND PAPER M IL L S
0.02
0.01
0.06
0.02
0.01
0.14
0.06
0.02
0.18
0.14
0.06
0.23
0.18
0.14
0.37
0.23
0.18
0.41
0.37
0.23
0.52
0.41
0.37
1.25
0.52
0.41
1.40
0.521.25
2.04
1.40
1.25
4.00 4.00 4.00
2007 Environmental Performance–
Air (NOx–Nitrogen Oxides)
4.67
3.58
3.58
3.38
3.26
2.573.21
3.38
3.26
3.21
3.58
3.38
3.26
3.21
2.57
2.53
1.91
1.86
1.38
1.25
1.82
1.38
1.25
1.85
1.381.82
1.86
1.85
1.82
1.91
1.86
1.85
1.25
0.2
0.2
0.250 0.250 0.250
Espanola
Columbus
Hawesville
Espanola
Columbus
Windsor
Hawesville
Espanola
Dryden
Windsor
Hawesville
Marlboro
Dryden
Windsor
1.25
Kingsport
Marlboro
Dryden
1.38
Woodland
Kingsport
Marlboro
1.82
Johnsonburg
Woodland
Kingsport
1.85
Kamloops
Johnsonburg
Woodland
1.86
Port Huron
Kamloops
Johnsonburg
1.91
Rothschild
Port
Huron
Kamloops
2.53
Ashdown
Rothschild
Port
Huron
2.57
Plymouth
Ashdown
Rothschild
3.21
Port Edwards/Nekoosa
Plymouth
Ashdown
3.26
Port Edwards/Nekoosa
Plymouth
3.38
Port Edwards/Nekoosa
3.58
Columbus
0.300 0.300 0.300
6.00 6.00 6.00
P U L P AND PAPE R M I LLS
1.00 1.00 1.00
0.00 0.00 0.00
2.57
1.91 2.53
2.53
3.00 3.00 3.00
2.00 2.00 2.00
0.350 0.350 0.350
8.00 8.00 8.00
4.00 4.00 4.00
0.348
10.00 10.00 10.00
Plymouth
5.04
5.04
6.00 6.00 6.00
25.14
(kg/tonne)
(kg/tonne)
(kg/tonne)
25.14
12.30
(kg/tonne)
(kg/tonne)
(kg/tonne)
25.14
12.30
(kg/tonne)
(kg/tonne)
(kg/tonne)
12.30
2007
Environmental
Performance–
20072007
Environmental
Environmental
Performance–
Performance–
Air (TRS–Total
Reduced
Sulfur)
Air (TRS–Total
Air (TRS–Total
Reduced
Reduced
Sulfur)
Sulfur)
5.68
LPAPER
P AND
PU L PPUAND
LPU
P AND
PAPER
MPAPER
IL LMSIL LMSIL L S
2007
Environmental
Performance–
20072007
Environmental
Environmental
Performance–
Performance–
Air
Dioxides)
Air (SO
Air 2(SO
–Sulfur
–Sulfur
Dioxides)
Dioxides)
2–Sulfur
2(SO
5.68
P ULP
P
A PM
ER
P ULPP ULP
A ND
APND
A PAER
PNADPMILLS
ER
IL LMSIL L S
2007
Environmental
Performance–
20072007
Environmental
Environmental
Performance–
Performance–
Air (NOx–Nitrogen
Oxides)
Air (NOx–Nitrogen
Air (NOx–Nitrogen
Oxides)
Oxides)
5.04 5.68
APE
MI LLS
P ULPP UL
ANPU
PDALPNPADPAEPNRADPMP
EILLS
R M IRLLS
0.348
2003
0.348
TRS (Kg/Tonne)
TRS (Kg/Tonne)
TRS (Kg/Tonne)
2.87
AIR
2.26 2.740.12
2.00 2.002.00
0.12 0.120.12
2.81
2.74
2.87
2.50 2.502.50
2.81 0.13
3.00 3.003.00
28
2.87 0.13
0.14 0.140.14
2.87 0.13
2.81
3.50 3.503.50
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 2 9
PULP AND PAPER MILLS
Specific Generation of Waste Material Going to Landfill
WASTE
(kg/tonne of production)
LANDFILLED
90
92.70
95
85
−33.6%
80
77.55
75
70.73
70
65
55
60.00
61.33
60
50
2003
2004
2005
2006
Highlight:
Success stories:
• Between 2003 and 2007, the amount of
• Johnsonburg, Pennsylvania:
2007
waste landfilled per ton of paper produced
In 2007, the Johnsonburg mill continued its support of land reclamation efforts and wildlife
was reduced by close to 34%. This reduction
habitat improvement in cooperation with the Pennsylvania Game Commission and the Rocky
was achieved by maximizing the use of raw
Mountain Elk Foundation. Approximately 40 acres of former strip mine land was reclaimed
materials, increasing recycling, reusing
using sludge from the mill’s effluent treatment plant. Additionally, waste residuals from mill
previously wasted chemicals as by-products,
operations were beneficially used to improve historical acid mine drainage issues within Elk
and beneficially reusing biosolids.
County in cooperation with the Pennsylvania Department of Environmental Protection. Today,
less than 5% of mill waste is landfilled thanks to beneficial use and recycling opportunities.
• Ashdown, Arkansas:
The Ashdown mill and its recycling contractor, Caraustar, work hand in hand in the recycling
effort to help area schools raise money for school projects. Caraustar picks up the paper
while Domtar provides the bins. The program has grown over the past ten years to include
thirteen schools.
Compliance
Fines / penalties
In 2007, Domtar paid $58,925 in fines for two incidents that occurred at two different facilities.
All incidents were analyzed and corrective measures have been implemented. These events had
minor environmental impacts.
Reportable releases to regulatory agencies
In 2007, a total of 25 reportable releases were registered (4 related to air, 9 related to water and
12 related to soil). Corrective actions have been identified for each of these events and tracked
through completion. No further actions are required.
Third-party audits
As part of Domtar’s environmental audits program, we have conducted three third-party
compliance audits at our facilities in 2007. The action plans following the audits are tracked
through completion. In 2008, seven environmental audits will be conducted.
domtar TARG ET
30
Virgin vs. Recycled Fiber:
An Unnecessary Battle.
Virgin fiber harvested using recognized third-party certified
sustainable forestry practices is as environmentally sound as the
use of recycled fiber.
and socio-economic impacts. Any business
can apply this concept to its decision-making
processes related to environmental and
product stewardship, product design and
improvement. The life cycle approach can
also be used as a scientific tool for gathering
quantitative data to inventory, weigh and
rank the environmental impact of products
and activities.
It’s important that we all put more science
A well-managed forest provides renewable
from recycled paper cannot make this claim
resources, respects biodiversity and brings
because its origin is often difficult if not
into our sustainability models to ensure
a wealth of socio-economic benefits to
impossible to trace.
that we make informed decisions. Domtar
its neighboring communities, including
Nonetheless, recycled fiber can be used
recognizes and respects that some will
the potential for employment and
to make paper. Paper is versatile and, as is
attribute more value to a specific approach
recreational activities.
the case with aluminum, plastic and steel,
to sustainability (e.g. forest certification,
can be reprocessed into raw material and
recycling, climate change, etc.). But to take the
to ensure that sound forest management
reused. According to the American Forest &
position that recycled fiber is “better” than
practices are implemented and that all
Paper Association (AF&PA), 56% of the paper
virgin is both unscientific and inaccurate. It
environmental and social aspects of forest use
consumed in America in 2007 was recovered for
doesn’t take into account the life cycle of paper
are considered. In North America, more than
recycling. Domtar fully supports the AF&PA’s
and science needs to be part of the equation.
half of the trees are harvested to make wood
new goal to achieve 60% recovery by 2012.
While extreme positions make for catchy
Third-party certification is the best way
products including lumber and furniture. The
There are intrinsic limitations to the use of
headlines, they do not provide a solution
by-products of this process are used to make
recycled fiber that make the need for virgin
to the sustainability debate but simply add
paper. Third party certification ensures that
fiber inevitable. These include the loss of
fuel to the fire.
the virgin fiber used to make wood products
yield and strength during the repulping and
and paper originates from sustainable forests.
deinking processes, as well as increased yield
Management studies have demonstrated that
Until all the world’s forests are certified, fiber
loss as the fiber is recycled again and again.
the environmental benefits of recycled fiber
Generally, fiber can be recycled no more than
in the production of business papers can vary
five to seven times.
greatly depending on the source of the paper
Why all papers can’t be
made from recycled fiber
Not all papers can be recycled. Data collected
by the AF&PA shows that 7% of all papers
used in North America are lost in the disposal
of tissue and other non-recyclable paper.
Another 7% is lost to long-term retention
(books and archives). Overall, at least 14% of
paper cannot be recovered for recycling.
In 2006, Metafore, an environmental nongovernmental organization, carried out a
Paper Life Cycle study showing, among other
Domtar supports optimizing the collection
Recent, peer-reviewed Life Cycle
being recycled, its prior destination (landfill or
and use of recycled fiber, especially for ideally-
another use), and the facility where it is being
suited paper applications. This includes
recycled into new paper (trucking distances
single use products (e.g. tissue), short-lived
and their impact on climate change). Domtar
products (e.g. newsprint) or products that
will continue to participate in the development
do not require high optical surface quality
of management tools that will take these
(e.g. containerboard, wallboard, etc.). Not all
factors into account, and will apply these
categories of paper can be recycled for use in
tools, as they become available, to its decision-
printing and writing paper grades.
making process regarding the use of recycled
Domtar maintains that both recycled
and virgin fiber have their purpose and
justification. Domtar favors the use of life cycle
fiber in its papers.
domtar TARG ET
management concepts to determine where and
Domtar’s recycled products
such as the ones made by Domtar, were
when it is appropriate to use recycled fiber in
Domtar offers a variety of printing and office
to be made exclusively of recycled fibers,
the papermaking process. The paper industry
papers that contain post-consumer fiber,
production would cease due to a lack of fiber
can use all of the recycled fiber available. But
including Cougar® (10% post-consumer waste
in a matter of a weeks. This time is longer
the recycled paper industry also depends on
or PCW), Recycled Husky Xerocopy (30% PCW)
for grades such as newsprint or tissue, but
virgin fiber; we’re all part of the cycle.
and Recycled File Folder (30% PCW with the
things, that if printing and writing grades,
still measured in months, not years. This
independent assessment demonstrates that
making paper from 100% recycled fiber, while
technically feasible on the very short-term, is
not sustainable. The input of virgin fiber into
the paper stream is essential. It’s simply a
question of balance.
A life cycle view of recycled fiber
Life Cycle Management is a “cradle to grave”
approach to thinking about products,
processes and services. It recognizes that all
stages of a product’s life have environmental
remainder being pre-consumer wastepaper).
Other papers containing recycled fiber, such
as EarthChoice® Tradebook™, can also be
provided to customers on demand.
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 3 1
ONGOING
challenges
Although Domtar continuously strives to minimize the
environmental footprint of our operations, a variety of factors
come into play that sometimes prevent us from doing as much as
we would like as quickly as we would like.
Soil remediation
The particular challenge in this case is
Water consumption
Domtar has a structured Care and Control
the lengthy investigation and remediation
While some of Domtar’s mills, such as
program that addresses potential soil,
process, which is subject to legal,
Windsor, Hawesville and Johnsonburg, are
sediment or groundwater contamination
technological and budgetary constraints.
among the lowest industrial water users in
resulting from the operations of some of
But efforts continue. As an example of these
North America, their strong performance
our former facilities, mainly in the wood
efforts, a section of a Northern Ontario
is offset by some of the older mills whose
preserving sector. Since 1993, we have
creek, located adjacent to a former wood
current technology makes it difficult to reduce
adopted a risk-based remediation approach
preserving facility, was fully rehabilitated in
water use without affecting product quality.
in which investigation and engineered control
2007 in collaboration with two partners and
Current efforts to reduce energy use and,
measures are implemented to transition
a community group. As of December 31, 2007,
concurrently, greenhouse gas emissions will
sites to a new, beneficial use that meets the
a financial provision of $46 million has been
see this number decrease in the coming years.
health and environmental requirements
allocated to address remediation projects.
of all the stakeholders involved. To ensure
the best possible outcome, this effort is
conducted jointly with local community and
government authorities.
This risk-based approach fosters the
sustainable development of these lands since
it optimizes restoration while minimizing any
indirect negative impact on the environment.
SO2 emissions
In recent years, sulfur dioxide (SO2) emissions
at Domtar facilities have been on the rise.
This is directly attributable to the broader
economic trend that has seen the price of
energy and fuel climb dramatically across
North America.
It also ensures that the lands benefit the
Climate change
community (parks, commercial use).
This is as much an economic as an
environmental challenge. Domtar has made
great strides in reducing its carbon footprint.
It recognizes that more will be demanded and
is well prepared to address this challenge.
“Our employees are our most valuable asset
and no ton of paper is worth risking their
well-being.”
Raymond Royer, President and CEO
3
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 3 3
SOCIAL
commitment
Employees are Domtar’s most valuable assets. We fully recognize this and
demonstrate our appreciation by providing our people with a stimulating
work environment where they can grow and thrive. We place a strong focus on
ensuring that our employees stay safe and healthy at work, and provide them
with compensation and benefits that reflect the caliber of their skills and their
real impact on our success. At the same time, we recognize our importance to
the communities in which our employees live and work, and strive to maintain
mutually beneficial relationships with all of our neighbors.
A SOURCE OF VITALITY
FOR THE COMMUNITY
Government revenues
preventing and eliminating hazardous
2007 Estimated Taxes
conditions and risks of injury. Our facilities
Municipal
Canada
$4.7 M
$25.2 M
United States
$112 M
$19.2 M
prosperity of the communities in which
its operations are located. We are a major
employer, providing competitive wages and
benefits, procuring goods and services from
local providers, and contributing millions
have taken up the challenge willingly,
Federal
provincial
State
Domtar plays a major role in the economic
working continuously to improve their OH&S
performance.
In the U.S., federal and state governments
A number of initiatives took place to
leverage best practices from all our mills to
improve our current system. Our objective is
ambitious – to be the best in our industry in
of dollars every year in municipal, school,
collected $112 million in tax revenues from
OH&S. We still have some work to do, having
state/provincial tax revenues. As well,
Domtar’s mills in 2007. In Canada, the total
placed tenth out of 24 in the 2007 U.S. Pulp and
we are an important contributor to local
was nearly $5 million. We paid an additional
Paper Safety Association benchmark study.
causes that touch the lives of thousands. We
$19.2 million in municipal taxes to the
encourage the involvement of our employees
communities in which we operate in the U.S.,
are being ramped up to establish a common
in community activities, and hundreds of
and $25.2 million in Canada.
safety approach, the “Domtar Safety Way”,
them volunteer their time to make their
neighborhoods better, friendlier and better
places to live.
Stimulating
the local economy
Employee Health and
Safety: a core value Occupational Health and Safety (OH&S) is
more than a priority at Domtar: it is a core
operating value. In fact, we have made a
But, with a firm target in sight, efforts
across all facilities by the end of 2008. The aim
is to have consistent processes across the
board so that any weaknesses can be more
easily identified and addressed, and strengths
more readily shared among all locations.
domtar TARG ET
Domtar mills help local communities thrive
fundamental promise to our employees to
through the tens of millions of dollars in
protect them while they are on the job so that
important factor in improving Domtar’s
wages they pay their employees every year.
they can go home safe every night to their
overall OH&S performance going forward.
These wages are spent on buying homes,
families. In every decision we make, OH&S is
Initiatives are already in place to promote
vehicles and goods and services, often in the
the first consideration.
exchange, such as monthly safety conference
towns where the facility is located. In addition,
In our updated Health and Safety Policy,
The sharing of best practices will be an
calls that gather all facility managers to
Domtar uses many local contractors, service
which was approved and endorsed by the
review and analyze any incidents that took
providers and distributors of various products
Board of Directors in 2007, we have committed
place during the previous period and to
to increase local employment opportunities
to making employees part of the process by
discuss how to avoid reoccurrences.
and enhance overall economic activity. enlisting their contribution in identifying,
34
Selected Health and Safety Awards
full review of its Corporate Safety Audit
and Achievements
Program to ensure that all its operations are
PAPER IS A PEOPLE
BUSINESS
• Windsor – Canada’s safest mill in 2007
in the “Over 100,000 Hours Worked
Monthly” category by the Canadian
Pulp and Paper Association.
complying with applicable safety regulations,
In order to be successful, Domtar believes
implementing strong and efficient safety
that a company must provide its people with
management systems, building a strong
the means to grow both professionally and
safety culture and promoting the sharing of
personally. A well-trained and motivated
• Brownsville, Dallas/Fort Worth,
Dubois, Ridgefields, Rock Hill and
Tatum converting centers – The
American Forest & Paper Association
(AF&PA) 2007 Safety Excellence
Certificate
best safety practices. As part of this program,
workforce drives performance and is key to
every facility will undergo an independent
ensuring Domtar’s long-term success.
In 2007, Domtar also completed a
• Ear Falls – 2006 District Health and
Safety Achievement Award from the
Ontario Forestry Safe Workplace
Association.
• Washington Court House – Four
years without a lost-time accident in
November 2007.
• Rock Hill – Five years without a recor­
dable injury and ten years without a
lost-time injury at the end of 2007.
decreased by 20% between 2006 and 2007
to 2.34. Unfortunately, this performance fell
short of the year’s target of 2.11. On a more
positive note, the average number of days
lost due to injury went down by 43% during
the year, suggesting that the incidents were
generally of a less severe nature.
promote satisfaction among our employees
and encourage employee engagement.
Domtar Safety Performance
Following the transaction that created
the new Domtar, a multi-disciplinary
committee was put together to review all
human resources policies, guidelines and
standards. Based on the needs of the company
best practices, the committee proposed 31
draft policies. To date, 20 of these have been
published and the other 11 are scheduled to be
3.50
published in 2008/2009.
Global compensation policies, guidelines
2.34
3.00
The integration challenge
and our employees, and after referring to
2.50
and standards were also reviewed. The plans
2.00
for salaried employee retirement, health and
1.50
1.00
welfare, and compensation have currently
0.73
0.69
• Rothschild – Safety Excellence
Certificate for reaching one year
without a day away from work
(Jan. 2006 – Dec. 2006) from the AF&PA.
Domtar’s programs and policies aim to
Domtar’s total incident frequency rate
2.94
• Rothschild – Two safety awards from
the Pulp & Paper Safety Association: Most Improved Mill Award for 2006 and
No Lost Work Days 2006.
2007 saw some important improvements
in incident frequency and severity. In fact,
0.94
1.22
• Kingsport and Marlboro mills and
Cerritos, Indianapolis, Langhorne and
Washington Court House converting
centers – 2007 AF&PA Safety
Recognition Program – No Lost Work
Days certificate
safety audit at least once every three years.
been harmonized and integrated.
0.50
0.00
2006
2007
Total Frequency
Lost-Time Frequency
Lost-Time Severity
Total Frequency > Number of recordable cases per
100 employees
Lost Time Frequency > Number of cases per 100 employees
involving days away from work
Lost Time Severity > Average number of days lost
by employees
Respect for others,
A Domtar core value = diversity
Domtar is committed to its core value of
respect for others. This translates in practical
terms to a profound acknowledgment of
the business value of diversity within our
workforce. We are committed to diversity in
race, religion, ethnicity, gender and thought.
As a North American. Equal Opportunity
Employer, we seek diverse talent within
Rock Hill employees, proud of their success in
health and safety
• Dryden and Ear Falls forestlands –
Fourteen years of operation without
a single injury at the end of 2007 –
Recipient of the Safe Workplace Ontario
Certificate which is the highest safety
distinction within the Ontario Forestry
Safe Workplace Association (OFSWA).
Domtar will complete 16 safety audits at
the labor market through various outreach
pulp and paper mills, sawmills, converting
programs and recruiting initiatives. Our
centers and distribution centers in 2008.
progress in this important endeavor is
domtar TA RG ET
In 2008, Domtar set a target of 1.99 for its
total incident frequency rate.
domtar TA RG ET
measured through our Affirmative Action
Plans. In addition, high talent employees are
identified through the succession planning
process for individual development and
preparation for future leadership roles.
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 3 5
Managing performance
An employee assistance program offers
Recognizing dedicated service
Domtar firmly believes that the quality
employees and their families, as needed,
Domtar has a structured program to
of a corporation reflects the quality of its
a range of confidential services. Help is
recognize years of service. Employees receive
employees. As a result, we have committed
available 24 hours a day, seven days a week.
a commemorative gift every five years in
to providing our team members with the
There are also other advantages to working
appreciation of their ongoing dedication to
tools they need to contribute actively to our
for Domtar, including purchase programs
the company. A number of Domtar facilities
success while fulfilling their professional
with a North American car manufacturer,
also hold special events for their retirees
aspirations.
Microsoft Corp. and Hewlett-Packard, which
to give them the opportunity to return to
provide employees with significant discounts
their old stomping grounds and catch up
(PMP) recognizes the active contribution
on specific purchases. Some mills offer on-site
with former coworkers. The Woodland mill,
that each employee makes to the successful
physical conditioning facilities, while others
for example, holds several activities during
execution of Domtar’s business strategy.
offer discounted rates at local fitness centers.
the year including an annual retiree day
The PMP includes the setting of objectives,
The Head Office in Montreal has an on-site
every June.
planning, mid-year review, follow-up,
daycare center.
The Performance Management Process
and performance assessment. It lays the
such objectives as improving employee
The learning never stops
Excellence in education scholarships
and internships
performance, clarifying the employee’s
Ongoing training is important for Domtar
Domtar helps foster higher education among
area of activity and making Domtar a more
to maintain our competitive edge. It is also
the children of its employees and retirees in
productive organization.
a source of motivation to employees who
the U.S and Canada through its longstanding
are seeking to broaden their skills and
scholarship program. In 2007, the program was
safety and environmental performance
climb within the ranks of the organization.
expanded to offer a total of ten university-
are included in all operational PMP targets.
Numerous training programs are available,
level scholarships in the amount of $2,000 (US/
Managers are held accountable for sustained
including on-line computer and technical
CDN). These scholarships are renewable for
improvements in both areas and their results
training within the mills. There is also
up to four consecutive years or until a first
are tied directly to compensation.
targeted management training, a key part
undergraduate degree is obtained. Awards
of the company’s planning for a strong
are given based on academic performance,
succession built on a base of seasoned
extracurricular activities and the quality of
Domtar team members.
reference letters.
groundwork for successfully achieving
In addition, it is important to note that
Other benefits
In addition to receiving competitive
compensation, Domtar employees have
access to a variety of benefits.
All full-time employees are offered a
retirement plan and health and welfare
benefits. These plans can vary depending on
Training undertaken outside the company
Domtar also offers student internships
is also encouraged. Employees returning to
and opportunities for summer employment at
school part-time to hone their professional
several of our facilities.
skills or acquire new ones can apply to have
their tuition fees reimbursed.
the jurisdiction (Canada or U.S.) and whether
the individual is a member of a union or a
staff member.
PROMOTING DOMTAR
As the largest integrated manufacturer and marketer of uncoated freesheet paper in North America, Domtar’s need for talent is greater
than ever. That is why we are seeking to increase our visibility on the North American job market. A project is currently underway to revamp
Domtar’s corporate image to attract more attention from potential candidates by building relationships with professional associations,
attending college and university job fairs, and posting on targeted job boards.
36
A STRONG LOCAL PRESENCE
Domtar employees are active forces in their communities. They act as the company’s
ambassadors on local committees, contribute to philanthropic endeavors, and help their cities
and towns grow by lending their time and expertise to causes that benefit their neighbors.
Working together for a good cause
• The Espanola mill has several employees
In recognition of Domtar’s contribution
We encourage our employees to volunteer
who volunteer for Northshore Search and
In 2007, the Kingsport mill won a Business
to their favorite causes. You can find them
Rescue and the local Fire Department. The
Beautification Award from the City of
coaching local sports teams, mentoring,
mill also has an agreement with the town
Kingsport and the Kingsport Area Chamber of
leading Scouts and Brownies groups,
to provide assistance in rescue and fire
Commerce for its efforts to make the property
and serving on school boards, hospital
situations.
surrounding the mill visually pleasing .
foundations and more. They also frequently
join forces with other organizations to make a
difference in their communities.
We are very proud of the efforts of
our employees and thank them for their
selflessness and generosity. Here are just a
few examples of what Domtar volunteers
accomplished in 2007:
• In Rothschild, a number of employees
• In many Domtar locations, including
Head Office in Montreal, Fort Mill, Kingsport,
Nekoosa and Columbus, employees led
fundraising activities to benefit United Way/
Centraide, an umbrella organization that
contributes to hundreds of charities across
North America. Every year, tens of thousands
of dollars are raised, with the company
donating 50 cents for every employee dollar.
Kingsport mill
participated in the Department of Natural
The Espanola mill sponsors the “Tyrolean
Resources Wisconsin River Cleanup.
Traverse” at Camp Quality Canada, a special
• More than 75 employees from the
camp for children suffering from cancer. This
Port Huron mill took part in the annual
ride, which takes campers high into the trees,
Christmas Basket program to provide food
won the Award for Best Program or Activity
for underprivileged families.
from Children’s Oncology Camping Association
International. Meanwhile, the Woodland mill,
• Sixteen managers from the Matagami and
along with 15 other local organizations, was
Val-d’Or sawmills let their heads be shaved
as part of the “Shaved Heads Challenge” to
raise funds for Leucan, an organization that
supports children suffering from leukemia
and their families.
Doris Bush, United Way Executive Director
and Charlie Floyd, Vice-President and
Kingsport Mill Manager
• Blood drives are held annually at Head Office
and numerous other facilities.
John Sortall, Information Technology
On June 11, 16 managers from Val-d’Or and Matagami
steeled themselves and let their head be shaved as
part of the “Shaved Heads Challenge” for Leucan.
• Employees from the Marlboro mill sit on the
Local Emergency Planning Committee. The
mill has committed to offer the services of
its Emergency Response Team to help the
community in the event of a disaster.
Christine Marenger, Human Resources
recognized by the St. Clair County Community
Mental Health annual meeting for their efforts
during the 2006 campaign.
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 3 7
Advancing education
In addition to the corporate Excellence in
Education scholarships available to the
children of all Domtar employees and retirees,
many of our facilities support local education
initiatives and institutions. A representative
“Never doubt that a small group of thoughtful
committed citizens can change the world. Indeed,
it is the only thing that ever has.”
from the Espanola mill sits on the board of
Margaret Mead, Anthropologist
Cambrian College and has helped develop
apprenticeship programs through its Skills
Technology Institute (SkyTech). The Rothschild
mill has provided scholarships to local
colleges and to a middle school class to attend
Trees for Tomorrow, an accredited specialty
school focusing on natural resource topics.
OUR PRESIDENT and ceo HONORED
In September 2006, Raymond Royer accepted
on behalf of all Domtar employees the
first ever Winds of Change Award from
the Forest Stewardship Council (FSC). The
honor recognized the team’s outstanding
contribution to the sustainability of Canadian
forests through its leadership in certifying
millions of acres to the most rigorous and
inclusive forest management standard in the
world – FSC.
Richard Descarries (back row, center) at Domtar
House with the students from Maine.
In 2006, Mr. Royer also received the 2005
Humanitarian Award for the Paper Industry
from the National Conference for Community
and Justice (NCCJ). He and, by extension,
all Domtar employees were recognized
Raymond Royer, RISI’s North American
CEO of the Year, on the cover of Pulp &
Paper Magazine.
for the company’s inclusive approach to
environmental commitment and relations
with First Nations.
Raymond Royer was named by RISI as the
2007 North American CEO of the Year for the
Checking out Domtar House, from left to right:
Natchez Knight, Jasmine Allen, Ashley Thompson,
Morgan Norwood, Jasmine Thompson, Jesika Grimes,
chaperone Shanda Grimes and teacher Shannon
Risinger from Ashdown, Arkansas.
It has also contributed donations to the local
forest products industry for a second time
in five years for his leadership role in the
transaction that transformed Domtar into the
leading manufacturer of uncoated freesheet in
North America.
Mr. Royer was also declared Executive
Education Foundation and Career Center. The
Papermaker of the Year by PaperAge Magazine
Ashdown and Woodland mills and the Head
in early 2008 and the PIMA 2008 Executive of
Office helped broaden the horizons of a group
the Year.
of high school and college students from
Arkansas and Maine by coordinating a visit to
Montreal to help them perfect their French
language skills.
On the cover of PaperAge Magazine,
as Executive Papermaker of the Year.
38
OPEN DISCUSSIONS
WITH THE COMMUNITY
Domtar’s First Nations stakeholders
QUEBEC
Domtar believes that transparent exchange
Not every community has a formal CAC,
with our stakeholders is the best way to
but this does not prevent Domtar mills
ensure mutually beneficial relationships
from taking active part in local exchanges.
with our neighbors. Many of our mills, such
A representative from the Marlboro mill sits
as Windsor, Ashdown and Woodland,
on the county’s Industrial Council, which
are represented on Community Advisory
discusses the impact of local industry on the
Committees (CAC), in which issues related to
neighboring community. And, in Espanola,
Domtar’s operations are freely discussed with
mill employees discuss environmental issues
members of the community. These meetings
with the local Environment Group, which has
have resulted in concrete actions being taken.
members from six neighboring towns.
In Woodland, for example, Domtar agreed to
• Cree Nation
(Waswanipi, Waskaganish
communities)
• Algonquin Nation
(Lac Simon, Winneway, Kitcisakik,
Lac Barrière communities)
• Attikamek Nation
(Obedjiwan/Opitciwan community)
ONTARIO
• Ojibway Nation
(Matagami, Matatchewan, Sagamok,
reconfigure some of its road system to address
Eagle Lake, Wabigoon, Whitefish Bay
the safety concerns of local residents.
First Nations)
• Cree Nation
(Chapleau Cree, Missinabie
Cree First Nations)
MAINE
• The Passamaquoddy Tribe
The Staples Supplier
soul Award
Domtar was awarded The Staples Supplier
Domtar was commended for its well-
Soul Award during the recent 2008 Staples
documented history of responsible business
Vendor Show in Las Vegas, Nevada. This
practices, and for the fact that environmental
award was presented to Domtar in honor and
accountability is paramount for the Company
appreciation of a supplier who has helped
– not only in responsibly managing and
advance Staples’ Soul by strengthening its
protecting its forests, but also for creating
four cornerstones – community, diversity,
long-term economic viability.
ethics, and the environment – through
innovative programs and partnerships.
D omtar Corporation ı 2007 Sustainab le Grow t h Repor t ı 3 9
Global Reporting Initiative (GRI)
content index
Page
Strategy and Analysis
1.1
A message from Raymond Royer,
President and CEO
EN3Energy efficiency
1
Organizational Profile
2.1
Name of the organization
2.2
Primary products
2.3Operational structure of the organization
2.4Headquarters location
3, 4, 5
3, 7
7
3,4
2.5
Countries where we operate
3
2.6
Nature of ownership
3
2.7
Market served
2.8Scale of the organization
2.9Significant changes during the reporting period
2.10
Awards received
3, 14, 17
3, 7, 13–15
2–5, 7, 14
22, 34, 37, 38
3.1Reporting period
40
3.2
40
3.3Reporting cycle
40
3.4
Contacts information
40
3.5
Process for determining report content
40
3.6Boundary of the report
40
40
3.10Explanation of any restatements of
information provided in earlier report
40
3.11Significant changes from previous report
40
3.12GRI table
39
Governance, Commitments and Engagement
4.1Governance structure
19
4.2Highest governance body
19
4.3Information on the Board of Directors
19
4.14List of shareholder groups
4.15Basis for identification and selection of
shareholders with whom to engage
EN6Renewable Energy
25
EN8
27
Water consumption
EN16GHG emissions
26
EN18GHG emissions reduction data
25, 26
EN20 Air emissions
28
EN21 Water quality data
27
EN22 Waste lanfilled
29
EN23Reportable releases to regulatory agencies
29
EN26Initiative to mitigate environmental
impacts of products: Domtar Earth Choice®
and Forest certification
16, 21–24
EN28Fines and penalties
29
LA7Safety Performance
33, 34
Society
SO1Impact of programs on communities
SO5
Public policy position and development
21, 38
24
Economic
3.8Basis for reporting on joint ventures
Mechanisms for shareholders and
employees to provide recommendations
25
40
3.7Statement on any limitations
in scope and boundary
4.4
25, 26
EN5Results of energy efficiency programs
Labor Practices and Decent Work
Report Parameters
Date of previous report
Page
Environmental
19
19, 38
19
EC1Financial results
13
Annual Report on Form 10-K
available at www.domtar.com
EC2Opportunities and risk related
to climate change
18
EC6Stimulating the local economy
33
40
A BOU T TH I S R EP OR T
CONTA CTS
DATA
This first biennial Sustainable Growth Report covers the activities of Domtar Corporation
up to 2007. The information herein has been restated to reflect the major transaction
that took place during the year to create what is now Domtar Corporation. The report
therefore includes several new facilities and operations.
The information reported in this document covers the company’s pulp and paper
mills, as well as its sawmills and forest operations. Where information is available,
data has been included from the Domtar Distribution Group subsidiary. Domtar does
not collect data on joint ventures in which it has less than 50% interest, which are
primarily in the wood products sector, because they are managed in partnership
rather than directly by the company. As a result, these companies are mentioned
only as being part of Domtar’s assets and are not quantified in any of the tables. The
environmental data provided in this report deals strictly with Domtar’s pulp and
paper manufacturing operations, as they represent the company’s most significant
environmental footprint. Financial results are for fiscal 2007.
Guy L. Boucher
Vice-President, Sustainability
GLOBAL REPORTING INITIATIVE
Domtar has decided to issue its Sustainable Growth Report in accordance with the
guidelines of the Global Reporting Initiative (GRI). Our intention is to drill deeper in
coming years to meet additional indicators in all three main sectors of reporting.
REPORT CONTENT
Environmental data is gathered at the mills throughout the year and has been
consolidated for reporting. Information on key aspects of the business, such as financial
highlights, governance guidelines, product lists and production capacity data was
gathered from the 2007 Domtar Annual Review and 2007 Annual Report on Form 10-K.
Other data, such as quality, forest and environmental certifications and occupational
health and safety performances, are compiled throughout the year by the Sustainability
Group in consultation with the pulp and paper mills and forestry operations.
THIRD PARTY AUDITS
This report has been verified for Level “C” compliance by an auditor from the Global
Reporting initiative.
Richard Descarries
Senior Advisor, Communications
Pascal Bossé
Director, Investor Relations
RE P ORT FE E DBA CK
Feedback on this report from
our stakeholders is welcome.
Please write to us at
sustainability@domtar.com
Production notes:
Paper:
Cover printed on FSC‑certified
65 lb. Cougar Cover, Smooth Finish
Text printed on FSC‑certified
70 lb. Cougar Text, Smooth Finish
Ink:
AU DITOR’ S S TATEM E N T
The energy consumption data used in this Report has been verified by URS Corporation
(U.S. mills) and Golder Associates (Canadian mills) and has been found to be accurate.
Printed with UV ink out of 4‑color
Process, Match Grey (type only)
and a dot‑for‑dot dull varnish.
Press:
Printed on a 12‑color
40" Heidelberg Speedmaster 102P
press, equipped with interdeck
and end-of-press UV drying.
√
Third Party Checked
GRI Checked
√
C+
B
B+
A
A+
Report Externally Assured
Self Declared
C
Report Externally Assured
Mandatory
Optional
Report
A pp lication
Levels
Report Externally Assured
2007
In Accordance
Domtar Corporation
395 de Maisonneuve Blvd. West
Montreal, Quebec, Canada H3A 1L6
514-848-5555