Pulp Update

PRIMA is Europe´s organization for marketers in the paper and related industries.

Summarized here are PRIMA 2007 conference presentations on markets, including the impact of the energy market on the global economy and examinations of the Eastern European and Asian paper markets. Additionally, forward-looking presentations on the global pulp, paper and printing businesses were covered.

Mondo Business Paper´s Mark Ushpol’s presentation on Eastern European paper markets highlighted unbelievable growth in printing in Central and Eastern Europe in the past 5 years. And further strong growth is also expected in the coming few years, he added. Eastern European printing and writing paper consumption is also expected to grow strongly in the coming years, and he also pointed out that high growth in demand for PCs is expected to drive consumption of Cut-Size papers, although he admitted that demand growth looks flat for UWF Reels. Ushpol then looked at some economic issues in Eastern Europe, noting that many Eastern European countries rank perhaps surprisingly highly in global competitiveness comparisons, and that more Eastern European countries are catching up with the leaders than are losing ground. On a more cautious note, he pointed out that environmental issues in the region, including intensity of energy consumption, do require some attention.

The focus then moved to Asian markets, with Sunil Sood, Vice President Sales & Marketing for APRIL, taking the speaker´s stand. A market which already accounts for some 36% of global paper and board consumption and which has been growing at around +5% for the past decade and a half, is expected to grow at almost the same rate up to the end of this decade, he noted. He agreed with earlier speakers in that growth prospects look good especially in China and India, and pointed out in particular expectations for very strong growth in per-capita consumption in China in the next few years. This is forecast to drive Asian consumption growth particularly in Coated Woodfrees, Newsprint, Tissue and Containerboard, he added. He also touched on the subject of shifting paper production towards Asia, using the example of the Uncoated Woodfree sector, where multiple closures are expected in the USA and Europe this year, while Asian capacity is expected to rise by around a quarter of a million tonnes in 2007. The world´s largest importing region in that sector will remain the Middle East, he said.

Tom Wright of pulp industry consultants, Hawkins Wright, then examined global pulp markets. He pointed out that an increasing proportion of the world´s woodpulp is market pulp, partly because China is a large consumer with limited fiber of its own and partly because papermakers from mature markets are increasingly looking to satisfy their pulp requirements from sources in lower-cost regions in the southern hemisphere. He also noted that, as the pulp price (in US$) has risen, markets paying for pulp in US dollars have felt the full effect, whereas Canadian and European mills, with strong currencies versus the US dollar, have been more cushioned from the effect. At the same time, many North American mills have become uncompetitive, said Wright, partly because of mills size, lack of investment and high costs, as well as weak North American demand for paper, and Canadian pulp mills have also suffered because they have benefited less from price increases because of the strong Canadian dollar. This led to 2.7 million tonnes of woodpulp capacity being closed in 2005-2006, and more North American closures will follow, he predicted. In Europe, there have been no pulp mill closures yet, but with paper capacity being closed, some European pulp capacity is vulnerable, he argued, with birch pulp mills in competition with Latin American hardwood pulp mills. He also highlighted two global trends, which are the move of production to the south, and the substitution of hardwood (with its significantly lower supply costs) for the more expensive softwood.

Taking up the theme of paper itself, Martin Glass, Managing Director of paper-industry consultants, EMGE, forecast that global graphic paper demand growth would fall from an average of +3.1% in the past decade and a half to +2.4% from 2006-2011. In particular, this will be due to slow growth in the North American market, he predicted, despite stronger growth prospects in Asia and particularly China.

Chetwynd, BC -- Tembec announced the successful startup of the new tertiary refiner line at its High Yield pulp mill in Chetwynd, BC. The installation of this equipment will increase production by 10,000 ADMT. The capital cost of the project was less than $1 million.

"The increased capacity as a result of this startup will enable us to meet the growing demand for our product in the marketplace," said Yvon Pelletier, executive V-P and president of the Pulp Group. "As a global leader in the High Yield market pulp sector, we are continually improving our operations to ensure our competitiveness and ability to meet market demands."

Tembec is one of the world's leading market pulp producers. This optimization will raise the total capacity of the Company to approximately 2 million tonnes.

Temiscaming, QC -- Tembec has announced an indefinite idling of PM3 at its Kapuskasing newsprint mill, effective October 23, 2007. The company has also announced an indefinite shutdown of its Cochrane sawmill, starting October 19, 2007.

Chris Black, Tembec's senior VP, Newsprint Division, explains the Kapuskasing idling: "The indefinite idling of PM3 is necessary due to a combination of poor newsprint market conditions and a wood chip shortage that has occurred largely as a result of the numerous sawmill curtailments in Northern Ontario. The company has reviewed alternate source of fibre supply however, all options were detrimental to the

mill's financial performance." PM3 has an annual capacity of 100,000 tonnes. The idling will affect 50 employees at the location.

Dennis Rounsville, Tembec's executive VP and president of the Forest Products Group, discusses the Cochrane shutdown: "The indefinite shutdown at the Cochrane sawmill is being taken due to a combination of factors. These include poor demand for lumber, declining product pricing and the continued impact of the high value of the Canadian dollar." The sawmill has an annual production capacity of 150 Mfbm of SPF lumber and has about 150 employees.

Stora Enso has signed a definitive agreement to sell Stora Enso North America, Inc ("SENA"), its North American subsidiary, to NewPage Holding Corporation ("NewPage"), a leading North American coated paper producer. The combined company, to be called NewPage, will be among the North American leaders in its field.

Transaction consideration consists of USD 1 500 million (EUR 1 080 million) in cash, USD 200 million (EUR 144 million) in vendor notes and 19.9% of the shares in the new company valued at approximately USD 370 million (EUR 267 million). NewPage will also assume net liabilities of about USD 450 million (EUR 324 million). The transaction is expected to be finalised during the first quarter of 2008, subject to customary regulatory approvals.

The transaction will not generate a gain or loss when recognised in the third quarter of 2007, at current exchange rates and based on the book values of the assets prior to the impairment charge announced by Stora Enso on 5 September 2007. Furthermore, the divestment will reduce the estimated impairment charge of EUR 1 300 million by about EUR 800 million. The final gain or loss, if any, will be determined when the transaction is completed. The divestment is expected to have no material impact on the annual operating profit of the Stora Enso Group as the North American businesses being divested are currently about breakeven at the operating profit level.

"We believe that by combining Stora Enso's North American operations with those of NewPage, owned by Cerberus Capital, a leading private investment firm, we are contributing to the formation of a highly attractive player in the North American paper industry" said Jouko Karvinen, Stora Enso Group CEO. "This is the first major step in focusing our operations to improve the long-term earnings of Stora Enso. The divestment will simplify our Group structure and strengthen our focus on Europe as well as Stora Enso's growth markets," said Karvinen.

NewPage and SENA's combined pro forma annual sales and EBITDA were approximately USD 4 300 million (EUR 3 099 million) and USD 525 million (EUR 378 million), respectively, in 2006. The new company will be comprised of 12 paper mills with estimated production capacity of 4 754 000 tonnes. NewPage will be headquartered in Miamisburg, Ohio. Through its 19.9% interest, Stora Enso will participate in the benefits of the combination including value creation from significant cost synergies.

As part of the transaction, Stora Enso will divest eight publication, fine paper and speciality paper mills which will reduce the Group's annual production capacity by 2 745 000 tonnes and the number of personnel by about 4,350. The divested mills include Biron, Duluth, Kimberly, Niagara, Port Hawkesbury, Stevens Point, Whiting and Wisconsin Rapids mills.

Stora Enso will retain Corenso's North American operations. Corenso produces cores and coreboard for industrial use in various fields of business.

Sales reduction	EUR 1 950 million*
EBITDA reduction	EUR 189 million*
Capital employed reduction	EUR 1 750 million
Debt/equity ratio	From 0.64 to 0.42**

*Based on 2006 results for the divested businesses, with an average exchange rate of EUR/USD 1.2563

** Including impact of reversing the impairment from EUR 1 300 million to EUR 500 million in the third quarter of 2007

The divested Stora Enso North American operations will be reported as discontinued operations from the third quarter of 2007 onwards. The 19.9% ownership in the new company is considered as a financial investment and accounted for as an asset held for sale.

UBS Investment Bank and Pöyry Capital acted as financial advisors and Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor to Stora Enso in connection with the transaction.

Abitibi-Consolidated Inc. (NYSE: ABY, TSX: A) and Bowater Incorporated (NYSE: BOW, TSX: BWX) recently announced continued progress with the U.S. Department of Justice (DOJ) pertaining to their proposed combination. The companies reaffirmed their expectation that DOJ approval will be obtained within the next few weeks. As a result of this timeline, the closing is now anticipated for early in the fourth quarter.

The combined company, AbitibiBowater, will produce a wide range of newsprint and commercial printing papers, market pulp and lumber products. It will be the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater will own or operate 32 pulp and paper facilities and 35 wood product facilities located in the United States, Canada, the United Kingdom and South Korea. It will also be among the world's largest recyclers of newspapers and magazines, and will have more third-party certified sustainable forest land than any other company in the world.

Abitibi-Consolidated is a global leader in newsprint and commercial printing papers as well as a major producer of wood products, serving clients in some 70 countries from its 45 operating facilities. Abitibi-Consolidated is among the largest recyclers of newspapers and magazines in North America, diverting annually approximately 1.7 million tonnes of paper from landfills, and is an industry leader in Canada in terms of forest certification.

Bowater Incorporated is a leading producer of coated and specialty papers and newsprint. In addition, the company sells bleached market pulp and lumber products. Bowater has 12 pulp and paper mills in the United States, Canada and South Korea. In North America, it also operates one converting facility and owns 10 sawmills. Bowater's operations are supported by approximately 708,000 acres of timberlands owned or leased in the United States and Canada and 28 million acres of timber cutting rights in Canada. Bowater operates six recycling plants and is one of the world's largest consumers of recycled newspapers and magazines.

In connection with its ongoing strategic review, Weyerhaeuser Company (NYSE: WY) recently announced it will convert its Dodson, La., plywood operation to a 100 percent veneer manufacturing operation, effective Oct. 26, 2007. The company will also stop veneer production at its Colbert, Ga., mill within the next 30 days. The Colbert site will continue manufacturing Parallam® using veneer supply from Dodson and other Weyerhaeuser veneer operations beginning Nov.1.

These operating posture changes will affect about 70 employees at Colbert and less than 50 at the Dodson site.

“Today’s announcement is part of the ongoing effort to strengthen Weyerhaeuser’s residential wood products portfolio,” said Cathy Slater, vice president of Veneer Technologies. “There’s a shrinking demand for plywood and an increasing availability of alternative products. We made the decision after a thorough review of short-term and long-term demand for our plywood panels and to further integrate dry veneer into our engineered lumber products.”

“Shutting sections of the two mills was a difficult decision, but the reality of current markets requires that we allocate our capital with great prudence to ensure all manufacturing operations remain well positioned to serve our customers,” Slater said. “Weyerhaeuser’s employees work diligently to make our mills competitive and today’s announcement is a reflection of the challenging business environment we face. We recognize the impact this decision has on employees, and we will do our best to work with state and local leaders to assist in the transition.”

Weyerhaeuser Company, one of the world's largest forest products companies, was incorporated in 1900. In 2006, sales were $21.9 billion. It has offices or operations in 18 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities.

Weyerhaeuser Company (NYSE: WY) has signed a letter of intent to purchase the Idabel sawmill owned by Freeman Brothers, Inc., also doing business as Bibler Brothers Lumber Company.

Idabel is currently a contract sawmill for Weyerhaeuser and a chip supplier for Weyerhaeuser’s Valliant, Okla., containerboard mill. It employs approximately 130 people and has the capacity to produce 130 million board feet of lumber annually.

“We are pleased to reach mutually agreeable terms with Bibler Brothers,” said Rob Taylor, Weyerhaeuser’s vice president of Lumber Technologies. “We intend to safely operate the mill and meet our customer needs.”

The potential sale is subject to reaching a final sales agreement, company management approval and any required regulatory approval. Customer orders for this facility will not be impacted during the sales process. Terms of the sale were not disclosed.

Freeman Bros., Inc., owned by Terry Freeman, is based in Russellville, Ark. Freeman owns and operates Bibler Brothers Lumber Company in Russellville and the mill in Idabel. Bibler Brothers has been in existence since 1909 and Freeman purchased the Russellville mill in 1998 and the Idabel site in 2001. The company produces southern pine boards, dimension material, timbers and 5/4 inch premium decking. Freeman recently received several awards and industry recognitions for operating the Russellville and Idabel mills without a recordable safety incident.

Aldabra 2 Acquisition Corp reports that it has executed a firm commitment letter with Goldman Sachs Credit Partners for 100% of the debt financing related to Aldabra’s proposed acquisition of the paper, packaging, and newsprint assets of Boise Cascade. The $1.175 billion financing commitment consists of $925 million of senior secured term loan facilities and a $250 million senior secured revolving credit facility to fund the cash portion of the acquisition price. In addition, Goldman Sachs has agreed to increase the senior secured term loan facilities by up to an additional $60.7 million to fund an incremental cash portion of the purchase price in the event that some of Aldabra’s stockholders elect to exercise their conversion rights.

In addition, Boise Cascade and Aldabra have signed an amendment to the September 7 purchase and sale agreement to address any cash shortfall that might occur if Aldabra’s stockholders seek conversion rights in excess of the $60.7 million. In such a case, Boise Cascade has agreed to increase its ownership up to 49% of equity in Aldabra after the acquisition (which will be renamed “Boise Paper Co.) and accept a subordinated promissory note for any shortfall in the cash portion of the purchase price that arises in the event that exercise of conversion rights by Aldabra’s stockholders would result in Boise Cascade’s ownership exceeding 49%.

Nathan Leight, Aldabra’s Chairman, said, “We are pleased to make this announcement early in the transaction process, particularly in light of the difficulties experienced recently in the credit markets. We believe the prospects for Boise Paper Co. are excellent, and our ability to obtain financing further highlights the strength of the business and provides validation of this transaction. ”

Aldabra also received word that its request for early termination of the Hart-Scott-Rodino Act waiting period for the proposed acquisition has been approved. As previously announced, Aldabra expects to close the transaction in early 2008 subject to a receipt of stockholder approval.

Canfor Corp. reports that its wholly owned subsidiary, New South Companies Inc., has agreed to purchase the assets of Chesterfield Lumber Co. located in Darlington, S.C., for $18 million, which includes working capital. Annual capacity of the Chesterfield Mill is approximately 140 million board ft of southern yellow pine. The mill is located between New South’s Conway and Camden mills in South Carolina. The transaction is subject to customary closing conditions and expected to close in the fourth quarter.

Canfor is an integrated forest products company based in Vancouver, B.C., with interests in 33 facilities in B.C., Alberta, Quebec, Washington state, and North and South Carolina. The company is the largest producer of softwood lumber in Canada, while also producing oriented strand board (OSB), plywood, remanufactured lumber products, and specialized wood products. Canfor also owns a 50.2% interest in Canfor Pulp Ltd. Partnership, which is one of the largest producers of northern softwood kraft pulp in Canada and a producer of kraft paper.

Masisa S.A., Santiago, Chile will construct a new medium density particleboard (MDP) mill in the city of Montenegro, in the state of Rio Grande do Sul in Brazil. The mill will produce 550,000 cubic meters of MDP per year and includes a melamine line with a capacity of 220,000 cubic meters per year. The total project investment will be approximately $119 million.

"This investment is a great opportunity for Masisa to boost its presence as a major player in the Brazilian market, virtually doubling our production capacity in the country," said Enrique Cibie, Masisa's CEO. Startup of the new project, which will mainly supply the Brazilian market, is scheduled for late 2009.

Masisa Brasil will complete its product mix with this new MDP production line, incorporating the full offering of wood panels produced by the company.

"The Company is constantly analyzing different opportunities that arise in the region to grow, maintain and consolidate its leadership in each of the countries where it is present," Cibie said.

Masisa currently has two plants in Brazil, a distribution network of 40 "Placacentros" (licensed retail outlets) and approximately 17,000 hectares of forest holdings.

M-real, part of the Metsäliitto Group, has agreed to sell its Zanders Reflex speciality paper mill in Düren, Germany, to Arjowiggins Group, a global speciality papers producer. M-real says it will book a loss of approximately MEUR 20 from the transaction. The sale has no material impact on the company’s operating profit excluding non-recurring items. The transaction is expected to be completed by the end of this year and will be booked in the result for the last quarter of 2007.

"The sale of Zanders Reflex paper mill is part of M-real's strategic review. The mill is the only M-real plant that produces carbonless paper, so M-real is effectively withdrawing from that business. The value of Reflex fixed assets has already been written off earlier," says Mikko Helander, CEO of M-real.

M-real Zanders Reflex paper mill started operating in 1857. It has four paper machines, which jointly have an annual capacity of 100,000metric tons of speciality paper. The mill employs approximately 470 people and has sales of approximately MEUR 150.

Ahlstrom will put its Ascoli plant in Italy and Chantraine plant in France under review due to unsatisfactory profitability and cash flow. Both facilities are part of Ahlstrom’s Label & Packaging Papers business area and produce one-side coated papers for wet glue labeling, flexible packaging, and graphical end uses, mainly for the Western European markets.

The company will evaluate the long-term economic viability of the plants and the options to either sell or close both facilities. The plants have an annual production capacity of some 100,000 metric tons and employ approximately 300 people. The current combined book value of the plants is EUR 5 million, according to Ahlstrom, which added that progress of the review will be reported during the fourth quarter.

In other company news, Ahlstrom said that Diego Borello, currently senior VP of its Label & Packaging Papers business area, will assume responsibility for innovation and health, safety, and environment (HSEA) functions as of today. Borello will particularly focus on improving the energy efficiency in Ahlstrom’s operations. He continues to be a member of the corporate executive team.

As of the same date, Daniele Borlatto, currently VP, Filtration business in Europe and South America, is appointed senior VP of Label & Packaging Papers business area and a member of the corporate executive team. Borlatto joined Ahlstrom in 1990, and has held several managerial positions in sales and controlling prior to his current role. He continues to be based in Turin, Italy.

Billerud has awarded Voith Paper a contract to rebuild PM 7 at its Skärblacka, Sweden, mill. MG (machine glaze) paper will be produced on the 5.40 m-wide PM 7 in a basis weight range of 30 to 90 g/m2. Billerud notes that the rebuild will significantly improve product quality, strengthening the company’s market position in regard to MG papers. Startup of the rebuild machine is scheduled for April 2008.

The best basis weight profiles and jet quality are provided by the MasterJet F/B with dilution water control, lamella technology, and EdgeModule. The fourdrinier will also be extensively modernized and a carbon fiber reinforced breast roll will be installed. Formation will be improved by the installation of the DuoShake and DuoFormer D. The space-saving, low-maintenance VoithDrive will be installed as the drive for the hybrid former.

With the installation of further Voith components in the area of the MG cylinder, downtimes in the event of a web break will be reduced and the tail threading will be improved. For this purpose, a CompactPulper, a high-pressure water jet tail cutter, and a Fibron transfer band will be installed.

Another highlight of the rebuild is thetwo-roll EcoSoft calender with Nipcorect M roll. The 38-zone roll and the high flexibility of the shell allow very precise profile control. Roll surface temperatures of up to 210°C and line loads up to 300 N/mm provide optimum gloss and smoothness values for the paper. All Voith components are designed for a potential increase in speed in the future.

With three integrated paper and pulp mills in Sweden and a paper mill in England, Billerud produces 1.4 million metric tons of paper and market pulp annually.

International Paper and Ilim Holding S.A. have completed the previously announced formation of a 50:50 joint venture, the largest foreign- domestic alliance in the Russian forest sector. The joint venture will operate as Ilim Group. To form the joint venture, IP purchased 50%t of Ilim Holding for approximately $620 million. The deal received approval from the Russian Federal Antimonopoly Service in June and the partners signed a definitive agreement for the deal in August.

A key element of the joint venture strategy is a long-term investment program in which the joint venture will invest, through cash from operations and additional debt, approximately $1.5 billion in Ilim's four mills over approximately five years. This unprecedented investment in the Russian pulp and paper industry will upgrade equipment, increase production capacity and allow for new high-value uncoated paper, pulp, and corrugated packaging product development.

The pulp and paper mill that International Paper currently owns and operates in Svetogorsk, in Russia's Leningrad region, will not be owned by the joint venture and will continue to operate as part of IP's European Papers business. Similarly, Ilim Pulp's wood products enterprises will not be integrated into the joint venture; instead they will be combined to create Russia's largest wood products holding company.

"The formation of this 50:50 joint venture is a real strategic milestone for International Paper," said IP Chairman and CEO John Faraci. "Both parties bring important strengths and expertise to the JV, and we are very positive about the future success of this new partnership."

Mary Laschinger, IP‘s senior VP and president of IP Europe, added that "we are very pleased to begin our partnership with Ilim and work together to continue to grow this business. We believe the joint venture has all the ingredients needed for success: good management, talented, hard-working employees, a solid asset base with improvement potential, and strong supply positions in high-growth markets."

Chairman of Ilim Group Zakhar Smushkin noted that "today we are opening a new page in the history of Ilim Group and the entire Russian pulp and paper industry. We have formed an alliance that is unprecedented in our sector and will become the center of dynamic growth of the entire Russian forest products industry. This is a response to global market challenges and the appeals from the Russian President and the government of the Russian Federation. The company's products will be able to meet the demand of the growing Russian market for high-quality paper and packaging products and also resolve the import replacement problem. In five years' time, every fourth sheet of paper and every third corrugated box in the Russian market will be produced by our company."

The joint venture has formed a new board of directors that includes four members each from Ilim and International Paper. Board members from IP are: Mary Laschinger, Cato Ealy, senior VP, corporate development; Richard Phillips, retired senior VP, technology; Dwight Van Inwegen, CFO, IP Europe. Ilim is represented by the current Ilim Pulp shareholders, Boris Zingarevich, Mikhail Zingarevich, and Leonid Erukhimovich, as well as Zakhar Smushkin, who will also chair the board of directors. Paul Herbert, former International Paper senior VPt, has been named the joint venture's CEO.

Saigon Paper Corp. has ordered three stock preparation systems from Kadant Inc., Westford, Mass., for installation in its mill in Ho Chi Minh City, Vietnam, at a total cost of $13 million. The systems, which will be supplied by a subsidiary of Kadant, include a 450-tpd OCC system to produce linerboard, a 200-tpd OCC and mixed waste system to produce linerboard and fluting, and a 150-tpd deinking system to produce white top liner and tissue. The systems are scheduled for delivery in mid-2008.

Kadant also announced that it has been awarded several additional contracts with a combined value of over $22 million from an Asian customer for stock preparation systems to produce linerboard. These pending orders, which are scheduled for delivery in 2008 and 2009, will be recorded as orders when the down payments are received. It is currently anticipated the down payments will be received in late 2007 and mid-2008.

“The order from Vietnam, along with the pending orders, demonstrate the continued strength of the paper industry in Asia as more production shifts to that region of the world,” said William Rainville, chairman and CEO of Kadant. “We are pleased that the leading paper producers in Asia rely on Kadant as a trusted partner to not only provide world class technology and systems, but also to deliver the application expertise necessary to ensure the successful startup and operation of these critical systems.”

Lee & Man Paper Co. has ordered a new kraftliner board machine for its Hongmei mill in Guangdong province, China. The new PM 17, to be supplied by Metso Paper, will have an annual capacity of 400,000 metric tons and is scheduled to startup at the beginning of 2009. The total value of the order is approximately EUR 40 million. The new 3-ply board machine is a single-supplier delivery from Metso Paper.

Metso has supplied Lee & Man two board machines that started up in China this year (Changshu PM 8 and Hongmei PM 9). The board machine (PM 15) is currently under delivery to Lee & Man's new site in Vietnam.

Lee & Man Paper Manufacturing Co. is one of China's largest containerboard producers. The company has three containerboard mills with a combined annual production capacity of 2.2 million metric tons.

American Israeli Paper Mills announced that its board has approved an increase in the NIS 600 million (about $140 million) investment originally announced in November 2006 for a new 230,000-metric tpy packaging paper production line at its Hadera, Israel, mill. The investment is now approved at approximately NIS 690 million ($170 million). The new production line is scheduled to startup in mid-2009.

The company says that the increased investment is primarily due to the substantial rise in worldwide raw material prices during this period (particularly metal prices), a certain rise in civil engineering prices (attributed among others to the rise in raw material prices), fluctuations in exchange rates, and to the company's decision to purchase an advanced production technology in this field from global suppliers.

The investment also includes about NIS 30 million ($8 million) to expand collection of ONP and OCC by the company’s subsidiary operation, Amnir Recycling Industries, to be used as raw material for the packaging paper production line. The planned expansion is expected to double the amount of wastepaper collected by Amnir in these grades.

New Delhi, India -- Consumption of paper in India will double over the next eight years from the current seven million ton per year, according to the Indian Paper Manufacturers Association. The increased growth likely will be the result of increasing literacy rates and increased government spending on education.

Narayan Moorthy, secretary general of the IPMA, stated, "The growth in paper is inevitable and is likely to contribute significantly to the government's target of achieving an overall growth of 12% in manufacturing. Unfortunately, the rising cost of raw materials, primarily wood and wood products, are a big challenge facing the industry."

This high cost, along with sparse availability of raw materials, has stalled the growth of the paper manufacturing industry in India, and the IPMA is calling for access to degraded lands near manufacturing facilities. Moorthy explained, "The concept of captive plantation which industry is submitting is based on rotational planting and harvesting to ensure that once planted the entire area remains green in perpetuity along with generating employment and enabling the wood-based industry to become globally competitive."