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NewPage Will Shut Kimberly, WI Coated Papers Mill

July 30, 2008 - NewPage Corporation today announced that it will close its Kimberly, Wisconsin, mill at the end of August. The Kimberly mill currently operates two paper machines, Nos. 96 and 97, which produce approximately 500,000 tons annually of coated freesheet paper used for a variety of commercial printing and specialty applications.

About 475 employees will be affected by the shutdown, which is in addition to the 125 employees affected by the shutdown of Kimberly No. 95 paper machine in May 2008.

"The coated paper market is being hit with a slowdown in demand as the uncertain economy is reflected in a reduction in print advertising," said NewPage Chairman and CEO Mark A. Suwyn. "At the same time, we are experiencing higher input costs for raw materials and transportation driven by oil and natural gas prices. To balance the somewhat reduced demand in a manner that helps us reduce costs, we are closing our mill in Kimberly, Wisconsin."

"We continue to work to offset the negative influences by raising prices and driving productivity programs harder. We have made sufficient progress with the integration of our recently acquired facilities and we now have more flexibility to respond to customer needs. We can readily meet our customers' needs with our remaining facilities and at the same time improve our cost advantage versus our peers," Suwyn said.

Richard D. Willett Jr., NewPage president and COO added, "We are committed to setting production levels to match demand without over-supplying the marketplace. We also believe it is imperative to continue to look for ways to lower our costs. While the Kimberly mill has first-class paper machines and is operated by an excellent workforce, it doesn't have a pulp mill to support the paper operations. Because purchased pulp has become extremely expensive, the cost to run that facility is much higher than making the same products at our other fully-integrated, lower-cost locations.

"We now have the capacity and flexibility to produce a number of freesheet, supercalendered and groundwood grades on several different machines. For example, our Escanaba, Michigan and Rumford, Maine, mills which have traditionally manufactured mostly coated groundwood grades, will now become swing mills producing both coated groundwood and freesheet products. Therefore, while we are idling 500,000 tons of coated capacity at the Kimberly mill, the effect is likely to be approximately 200,000 tons of coated freesheet and 300,000 tons of coated groundwood."

SOURCE: NewPage Corp.




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