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Management Side
Arctic Paper Acquires German Paper Mill
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Gothenburg, Sweden, 10 September 2008 -- Arctic Paper, one of Europe’s leading companies in the manufacture and sales of fine paper, is acquiring Mochenwangen Papier GmbH. Necessary documents for regulatory and antitrust approvals have been filed with the German Bundeskartell. Mochenwangen produces mainly book paper and is one of Europe’s leading paper mills, manufacturing paper for paperback books. This production complements the paper range produced at Arctic Paper’s other mills.

Mochenwangen Papier manufactures 115,000 metric tons of fine paper annually. Most of this is used in books, and within its segment the mill is one of the larger on the European market.

”We have been interested in purchasing Mochenwangen for a long time, and have now reached an agreement with the previous owner regarding the conditions of purchase. With this acquisition we expand our product range and further broaden our array of strong brands. We will also be better positioned to strengthen our customer service,” said Olle Grundberg, CEO of Arctic Paper. ”Arctic Paper has grown organically in recent years. Our strategy is to grow further, both through restructuring with purchases of interesting European mills and through continued organic growth.”

The seller is the German company Golzern Holding, which has owned Mochenwangen GmbH since 2002.

Mochenwangen Papier is located in southwestern Germany, in the state of Baden-Würtemberg, close to large forested areas. The mill has 190 employees and produces well-known quality papers; 60% of the production is sold in the domestic market. The largest markets outside Germany are Italy, France, and the United Kingdom.

Mochenwangen Papier today has three paper machines. Arctic Paper intends to continue the process of increasing efficiency, modernization, and share of book paper production.

”We will also develop the mill’s sales organization, while also integrating it with our own. We see huge scope for using our strong sales organization, increasing the export of fine paper from the mill in Mochenwangen,” Grundberg said.

Just like Arctic Paper, Mochenwangen Papier is committed to sustainable environmental practices. The mill is working actively to ensure that more paper types produced in the mill will be made from pulp with environmental certification from the Forest Stewardship Council (FSC). This certification is an international standard, guaranteeing that the pulp originates from forests that have been cultivated sustainably.

”The purchase of Mochenwangen comes at a perfect time for us. Our industry has had a difficult seven or eight years and profitability is generally weak, but there are reasons for optimism. We have been able to increase the prices for fine paper, if only marginally, and the capacity balance has improved through the closure of some small mills,” Grundberg said.

Arctic Paper owns the Swedish paper mills Arctic Paper Munkedals AB and Arctic Paper Håfreströms AB, and Arctic Paper Kostrzyn S.A in Poland. With the purchase of Mochenwangen Papier, Arctic Paper increases its production capacity to 700,000 metric tons per year.

www.arcticpaper.com


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