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Ahlstrom Signs MOU With Zhejiang Kan Specialty Material Co.
Helsinki, Finland, 10 September 2007 -- Ahlstrom, a global leader in fiber-based materials, today announced that it has signed a Memorandum of Understanding with Zhejiang Kan Specialty Material Co (KAN Paper) to acquire a majority in a specialty papers company in China.

The assets in the joint venture comprise a paper machine, water treatment, power plant, and 15 hectares of land in Kaifeng, China, as well as the crepe paper business of KAN Paper. Ahlstrom will hold 70% of the shares in the joint venture.

The production capacity of the Kaifeng plant is currently 12,000 tons. The plant is located 200 kilometers southwest of Hangzhou and it employs 130 people.

"The deal is another step ahead in Ahlstrom's growth strategy, expanding our operations in the fast-growing markets outside Europe," said Jukka Moisio, president and CEO of Ahlstrom. "The joint venture further strengthens our position as the global leader in the specialty papers markets and also creates a platform that enables future expansions of our businesses in China," Moisio said.

"We will develop this state-of-the-art site, built in 2004, into a highly competitive manufacturing platform to serve our customers in the specialty materials markets. Ahlstrom's extensive network of sales offices in 10 Asia-Pacific countries enhances our ability to serve our customers across the continent", said Risto Anttonen, senior vice president, Commercial Operations of Ahlstrom.

The joint venture will be part of Ahlstrom's Technical Papers business area and it is aimed to serve the local crepe paper markets.

"The joint venture will also produce a wide range of other technical paper grades. Currently, the paper production is delivered to the local markets in China, but we aim to expand the customer base by utilizing our global specialty materials sales network", said Patrick Jeambar, senior vice president, Technical Papers of Ahlstrom.

The market for crepe papers is estimated to grow approximately 15% annually in China.

Ahlstrom expects to sign a binding agreement on the joint venture during the third quarter of 2007 and close the deal by end of 2007. The completion of the transaction is subject to the regulatory approvals and satisfactory conclusion of the due diligence process. In their negotiations, the parties have agreed that Ahlstrom has an option to purchase the remaining share in the joint venture after two years.

Ahlstrom has currently one manufacturing site in China producing dust filtration materials and three sales offices.

Ahlstrom is a global leader in the development, manufacture and marketing of high performance fiber-based materials. Nonwovens and specialty papers made by Ahlstrom are used in a large variety of everyday products, such as filters, wipes, flooring, labels, and tapes. Based upon its unique fiber expertise and innovative approach, the company has a strong market position in several business areas in which it operates. Ahlstrom's 6200 employees serve customers via sales offices and production facilities in more than 20 countries on six continents. In 2006, Ahlstrom's net sales amounted to EUR 1.6 billion. Ahlstrom's share is listed on the Helsinki Stock Exchange. The company website is www.ahlstrom.com.

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