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Fortress Paper Resumes Thurso Mill Construction After Labor Walkout

Vancouver, British Columbia, Canada, 27 October 2011 -- (Marketwire) -- Fortress Paper Ltd. (TSX: FTP.TO - News) has resumed construction activities at its Fortress specialty cellulose mill in Thurso, Quebec, after all employees of contractors engaged by the company reported to the construction site today.

The Fortress specialty cellulose mill began experiencing instances of construction worker absenteeism the evening of 20 October 2011, with certain trade workers failing to report in increasing numbers to the construction site the following day and throughout the weekend.

Fortress Paper understood that the walkout was a result of the opposition to a bill proposed by the Quebec government and not as a result of disputes with the company or their employers. The walkout affected construction projects across the Province of Quebec.

At the time, the company did not consider that these actions were likely to materially affect the timing of the conversion project at the mill. However, the unexpected full walkout by the construction workers on 24 October 2011, has impacted the critical path of the project. The company expects construction activity to reach normalized levels once the construction workforce is fully remobilized and construction activities are fully ramped-up, however it is possible that labor relations could change as a result of ongoing opposition to proposed government legislation.

The company is actively seeking to mitigate any delays, and assuming the construction workforce continues to be fully engaged in the project going forward, the company expects that dissolving pulp production will commence no later than mid-November 2011.

Ground was recently broken for construction of a cogeneration facility to provide 18.8 megawatts per year of green power to Hydro Quebec for a 15-year term, with completion planned for the second half of 2012.

Fortress Paper is a leading international producer of security and other specialty papers and products. Fortress operates three mills: the Landqart mill in Switzerland, the Dresden mill in Germany, and the Fortress specialty cellulose mill in Quebec, Canada. Fortress Paper's security papers include banknote, passport, and visa papers; its specialty papers include nonwoven wallpaper base products and graphic and technical papers. Fortress Paper's pulp business includes specialty pulp produced at the Fortress specialty cellulose mill, which is currently in the process of converting this capacity into dissolving pulp production along with the construction of a biomass based cogeneration plant.


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