Gunns Says in Talks With Sodra About Bell Bay Pulp Mill Project

Nov. 11, 2009 - Gunns Chairman John Gay today told the company's Annual General Meeting in Launceston (Tasmania, Australia) that the recent improvement in financial markets had provided an opportunity to progress the final stage of the $1.7 billion Bell Bay pulp mill project.

"The company is continuing to work positively with its banking group to close the project finance facilities," stated Gay.

"The company is also in dialogue with a number of parties regarding equity investment in the project. The Swedish forest products co-operative Sodra is one of these parties," Gay said.

"Gunns expects the external equity investment in the project to be approximately 40 percent of the mill equity requirement," he added.

Gay explained that the Bell Bay Pulp Mill would take advantage of Gunns' growing plantation timber resource.

"Gunns has a long-term aim to transform the company from a native woodchip business to a plantation-based company," said Gay.

"In the past 20 years, the company has purchased or secured more than 300,000 hectares of land for plantation development. The company's resource development has been aimed at producing a product that replaces native forest woodchips which have traditionally been exported to Asia.

"Now the company is endeavouring to build a domestic pulp mill to process this plantation resource," Gay concluded.

Gunns' proposed Bell Bay pulp mill, which would have an annual capacity to produce up to 1.1 million air dried tonnes of bleached Kraft pulp, has been met with prolonged opposition from environmental groups since its proposal in early 2005.

Since that time, Gunns has cleared a numerous environmental and political hurdles in its long-standing efforts to bring the pulp mill to fruition.

Bell Bay, in northern Tasmania (Australia) is the site for the mill.


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