American Israeli Paper Mills Ltd. Contracts for Packaging Paper Production System

Hadera, Israel, 10 March 2008 -- /PRNewswire/ -- American Israeli Paper Mills Ltd. (AMEX:AIP) [AIPM] announced that it has completed the signing of the central agreements for acquiring the principal equipment for a production system for packaging paper produced from paper and board waste, with an output capacity of approximately 230,000 tons/year, at an investment of NIS 690 million (approximately USD 170 million), at the company's Hadera site.

The manufacturing equipment is being ordered from Voith in Italy; additional complementary items were ordered from Metso in Finland.

The company will pay a total sum of EUR 48.4 million for the equipment. The equipment will already be supplied within the coming months through the beginning of 2009.

The company is expected to sign agreements with additional suppliers and contractors, including for the acquisition of additional equipment necessary for the production system, for the construction of the manufacturing building, assembly, etc.

Source: American Israeli Paper Mills Ltd.