The ratings on Montreal, Que.-based pulp and paper producer Domtar Corp. reflect what Standard&Poor's Ratings Services views as the company's fair business risk profile and its modest financial risk profile. Standard&Poor's believes that Domtar has a leading market position in the North American uncoated free sheet (UFS) market, good cost profile, low leverage, and diversification opportunity through its newly acquired personal care segment. These strengths are somewhat offset in our opinion by a steady decline in demand for UFS as well as volatile prices for commodity pulp. With about 38% of industry capacity, Domtar is the largest UFS manufacturer in North America, with 3.5 million short tons of capacity and 1.7 million metric tons of pulp
