American Israeli Paper Mills Ltd. Conversion to Natural Gas


Hadera, Israel, 27 August 2007 -- /PRNewswire/ -- American Israeli Paper Mills Ltd. (AMEX:AIP)(AIPM), announce that upon completion of the connection of the company's site in Hadera to the natural gas flow system, the company began to convert the existing co-generation system in the site to the use of natural gas. Natural gas will gradually replace the use of fuel oil in the following months in the paper manufacturing process.

The natural gas will be supplied by the Yam Tethys partnership until mid-2011. As previously reported, the company signed an agreement in principle with the Egyptian company EMG for an additional period of 15 years, commencing in 2011.

AIPM invested approximately NIS 30 million in the conversion to natural gas in infrastructure and conversion of the existing equipment.

The transition to natural gas is expected, upon completion, to further improve the quality of air emissions and to bring annual savings of approximately NIS 45 million in the fuel costs of the Group's companies (including associated companies).

AIPM estimates that at current fuel oil and gas price levels, and with the full operation of the co-generation system with natural gas, the effect on its annual net profit will total approximately NIS 25 million.

Source: American Israeli Paper Mills Ltd.