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Boise to Increase Pressure-Sensitive Capacity at Wallula Mill

April 10, 2006 (Press Release) - Boise Paper announced today that the company's board of directors has approved a $72 million capital project to expand Boise's production of pressure sensitive paper to meet growing customer demand. The project involves adding new capability to the existing 250" #3 paper machine at Boise's mill in Wallula, Washington, with state-of-the-art equipment that will increase the company's pressure sensitive capacity by 200,000 tons.

"Our objective is to be a global leader in the market for pressure sensitive papers," says Boise CEO Tom Stephens. "This project is another step forward in executing the growth strategy we have established in the specialty and premium papers businesses." Boise started preliminary engineering and planning for the project at the end of 2004. Since then, the company has made commitments to key suppliers and has been progressing toward the equipment installation pending final board approval of the project. Construction is expected to begin in June 2006; start-up is targeted for the first quarter of 2007.

"Investing to capture the continued growth in pressure sensitive market demand is a clear commitment to growing our specialty and premium paper businesses," says Miles Hewitt, senior vice president and general manager of Boise Paper. The company has been serving the pressure sensitive market for over 30 years. The increase in capacity at Wallula and new product development will enable Boise to keep pace with growing global demand, particularly release liners used in label applications.

Kirk Allen, business leader of Boise's Label, Release & Specialty Papers business, says, "Our technology provides us with the ability to produce coated one-side (C1S) facestocks and release liners while continuing to produce a range of uncoated products. This flexibility is critical given the value of managing pressure sensitive production growth as supply and demand dictates."

Recently passed legislation, which was signed into law by Governor Christine Gregoire in Washington State, will reduce the business and occupation tax for the forest products industry by 40%. "This legislation," says Hewitt, "and the support of Congresswoman Cathy McMorris were major factors in our decision to move forward with the project at Wallula."

SOURCE: Boise Paper




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