Nanocrystalline cellulose goes big

July 16,
2010, Montreal – Domtar and FPInnovations have formed a new joint venture
company to build the world's first 1-tonne/day commercial-scale nanocrystalline
cellulose demonstration plant at the Domtar Windsor, Quebec, pulp and paper
mill site. Construction will begin in the coming weeks and will take
approximately 20 months for completion.

"The
remarkable properties of nanocrystalline cellulose and wide range of potential
applications speak volumes about the commercial potential of new fibre-based
products that go beyond traditional pulp and paper applications," says
John Williams, president and CEO of Domtar.

Nanocrystalline
cellulose is a renewable, recyclable, and abundant material made of cellulose
fibers from the wood pulp manufacturing process. Potential applications include
optically reflective films, high-durability varnishes, and bioplastics. The
properties of this material will provide new opportunities in a wide range of
applications for a variety of sectors and markets such as the aerospace,
automotive, chemical, textile, and forestry industries. There are promising
applications for the aerospace industry that will complement Quebec's
innovative aerospace "green" aircraft program.

The cost
of construction of the demonstration plant is approximately CDN$32.4 million,
and operating costs are estimated at CDN$8.4 million, for a total investment of
CDN$40.8 million. CDN$12 million of Domtar's total contribution has been
submitted for funding approval under the Canadian government's Pulp and Paper
Green Transformation Program. Natural Resources Canada and Quebec's Natural
Resources and Wildlife Ministry are contributing CDN$10.2 million each to
FPInnovations' portion of the funding for this project. All funding is still
subject to approval.

Following
construction, under the joint venture agreement, Domtar and FPInnovations will
explore the commercial viability of the production of nanocrystalline cellulose
on a larger commercial scale.