The ratings on Domtar Corp. reflect Standard&Poor's Ratings Services' view of the company's leading market position in the North American uncoated free sheet (UFS) market, good cost profile, and low leverage. These strengths are somewhat offset in our opinion by a steady decline in demand for UFS as well as volatile prices for commodity pulp. Domtar is the largest UFS manufacturer in North America, with approximately one-third of industry capacity that comprises 3.7 million short tons of capacity and 1.5 million metric tons of pulp capacity. The majority of the company's paper capacity is in the U.S. We consider Domtar's business risk profile to be fair. The company has a leading market share in a consolidated industry where
