Mr. Royer: We are involved in three different product lines. First and foremost, Domtar makes fine, speciality and technical papers. Fine papers are mainly uncoated freesheet for copy, offset for printing and a highly regarded product in the industry called Plainfield. These types of papers are mostly used around the office as well as in some printing jobs. Speciality and technical papers range from coated freesheet grades to technical applications, such as food wrappings and surgical gowns. Many of our paper products like Windsor Offset, Cornwall Coated Cover, Plainfield Plus, Luna and Bravo are considered industry benchmarks. In addition, we have one of the largest distribution networks in our industry with more than 300 points of service throughout North America. Second, Domtar is a significant producer of lumber. We manage close to 15 million hectares of forest in Central Canada and the Northeastern United States. From these lands, we make close to 1.2 billion board feet of lumber products in different grades, including MSR. Finally, Domtar is also involved in packaging through a joint venture ' Norampac. These three product lines provide Domtar with sales of more than $2 billion (US). As for the business environment, our industry is very competitive. It's very simple, customers want quality products, competitive prices and good service. Domtar has been very successful at all three. First, we have put a lot of efforts to ensure that customers have the products they need. For example, just in the past years, we introduced four new grades of paper: Lighthouse Gloss, Schooner Gloss, Insignia and Weeds. We now even segregate species in order to produce unique pulp such as 100% maple pulp which provides better brightness. This is especially important for customers who need to reproduce photographs and things like that. Second, we continually improve processes to reduce our costs and therefore, remain very competitive on prices. More specifically, three years ago, we introduced a company-wide Quality and Productivity Improvement Program that demands considerable involvement from our employees. This program has exceeded our expectations. It has generated permanent improvements of $195 million (Canadian) net of inflation or more than $1 per common share. Our goal this year is to add $36 million (Canadian) in improvement to our cost structure. This program has permitted us to be one of the lowest cost producer in our industry. Finally, we noticed that you gain customer loyalty if you provide them with very good service. They are even willing to pay a small premium for this. For example, customers of printing and writing products value the fact that we have transferred our R&D people to our mills in order to ensure that their research is applied to meet their needs. As a result, our products are now known for their ability to get through a job without breaking (runability) and to provide outstanding results (printability). Customers also want flexibility in ordering and on-time delivery. Again, Domtar has set a new industry standard with e-PAPER: a comprehensive e-commerce application. With e-PAPER, customers are now able to order 24 hours a day, 7 days a week and receive their orders 'Just in Time'.
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