International Paper to Sell Amcel in Brazil

Nov. 28, 2006 - International Paper do Brasil yesterday signed a memorandum of understanding with Marubeni Corporation and Nippon Papers Industries Co. Ltd. for the sale of Amapá Florestal e Celulose S.A. (Amcel), a subsidiary company that produces and exports wood chips and biomass.

The sale is subject to the approval to the companies' boards of directors, IP said.

In addition to producing wood chips and biomass, Amcel's business activities encompass approximately 165,600 acres of pine and eucalyptus forests located in the municipal regions of Santana, Tararugalzinho, Porto Grande, Ferreira Gomes, Amapá and Itaúbal do Piririm, all located in the Brazilian state of Amapá. Amcel is located in Santana, in Amapá.

The sale of Amcel is in line with IP's transformation plan, launched in 2005, to focus on its global uncoated paper and packaging businesses, and xpedx, its North American distribution segment.

"Amcel has been a solid contributor to the company, with consistently high productivity levels. Amcel's talented management team, highly qualified professionals, high-quality products and unique commercial relationships with its clients are outstanding characteristics. However, the sale of Amcel is important and strategic to the achievement of the goals of the transformation plan, the ultimate objective of which is to turn IP into a more focused global company," says Maximo Pacheco, executive president of International Paper do Brasil.

About Amcel
Amapá Florestal e Celulose S.A. (Amcel) was established in 1976, with the objective of planting fast-growing forests (based on species adapted to local conditions) in the State of Amapá, the processing of timber in the form of wood chips used in the production of pulp, paper, and solid wood products. In 1996, Champion Papel e Celulose pulp and paper manufacturing company acquired shareholding interest in Amcel. In 2000, International Paper acquired controlling interest in Champion, and Amcel became part of the International Paper Group.

The entire production of eucalyptus and pine chips — equivalent to 1 million metric tonnes (GMT) — is exported to the United States, Europe and Japan for the manufacturing of pulp and wood products (boards and panels). In addition to the management and control of the processing and marketing of the wood chips, Amcel also produces biomass, which is obtained from residues of the debarking of pine and eucalyptus logs as well as from wood chip residues. The wood chip residues are used to produce energy.

Amcel employees, approximately 1,000 professionals (including company and outsourced employees), have enormous expertise in the wood products field. Amcel is totally committed to the health, safety and quality of life of its employees. Amcel supports the communities where its employees live and work, as attested to by the company's social accountability and environmental actions in the fields of education, health care and environmental conservation.

SOURCE: International Paper

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