Domtar spokesman Nicholas Estrela told PrintWeek that Xerox had essentially been operating as a paper reseller, adding: "They were basically purchasing about 200,000 tons of paper, mostly uncoated free sheet - which is what we make - from Domtar and other manufacturers. In Canada we had essentially 100% of their business."

Estrela added that Domtar will honor the suppliers agreements Xerox has in place in the US for the time being. "Short-term it's going to be business as usual," he continued.

"We're going to continue to supply them Domtar paper in Canada. In the US we'll continue with some of the supply agreements with the other manufacturers, but over time we'll bring some of that tonnage into our system internally."

Though Xerox does not have any paper manufacturing capability of its own, its brand is very well thought of in both the office and commercial printing paper space.

"We'll continue to make that paper; we're just taking over another step in the process," Estrela said, adding Domtar will be picking up some Xerox employees in the US as part of the agreement.

Estrela emphasized there will be no change in Xerox paper pricing or supplies, noting: "About the only thing that could change is maybe a phone number or contact information. But we will be able to start building relationships with some of the 1,500 paper clients they have, so it's a win-win for both sides."

Though it is getting out of the paper reseller business, Xerox said it will continue to manufacture, sell and support consumables such as toner and ink.

In a statement announcing the deal, Xerox Senior VP-Global Paper and Supplies Frank Edmonds said: "As Xerox broadens its business to focus more on services and innovative document technology, we saw an opportunity for our paper business clients to be better served by a leader in the industry.

"Xerox benefits through a trademark licensing agreement with Domtar; Domtar adds a well-regarded brand to its portfolio; and our respective clients get a simplified, ‘one-stop’ experience through Domtar’s extensive offerings and distribution network."