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Norske Skog to Move Idled Newsprint Machine to Brazil

Dec. 7, 2006 - Norske Skog said that it will move a newsprint machine from its Union mill in Norway, which closed earlier this year, to its Pisa mill in Brazil.

The move will increase the company's annual newsprint capacity in Brazil from 185,000 tonnes to 385,000.

"We expect market developments for newsprint in South America to remain highly interesting," said Norske Skog chief executive Christian Rynning-Tønnesen. "This investment shows good profitability, and will reinforce our position as the leading player in the region."

According to Norske Skog, newsprint consumption has risen by 5% annually since 2003 and the total market will exceed 500,000 tonnes this year. About two-thirds of this volume is imported, the company added.

Norske Skog said it will spend US $210 million moving and re-installing the newsprint machine.

The project includes an upgrade to the paper machine to increase its capacity, along with the expansion of the necessary buildings.

A new thermo-mechanical pulp (TMP) line will also be built, the company said.

Norske Skog expects the machine to be in operation in early 2009, providing the company receives the necessary approvals from the Brazilian authorities in the first half of 2007.

Norske Skog Pisa, part of Norske Skog since the acquisition of Fletcher Challenge in 2000, currently has one paper machine and about 350 employees. The workforce will increase by about 100 when the new machine is installed, Norske Skog said.

The company has another South American mill — Norske Skog Bio Bio in Chile.

SOURCE: Norske Skog




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