St. Petersburg, Russia, 07 April 2010 -- Ilim Group's board of directors has approved an investment of approximately USD 700 million to build a new kraft pulp mill in Bratsk (Irkutsk Oblast). The financing for the project is being arranged by the joint venture.

The project includes the construction of a modern cooking, washing, and bleaching line; a new pulp drying machine; a new recovery boiler; a new bark boiler; a new woodyard; and other infrastructure projects. The new pulp line will produce 720,000 metric tons of bleached softwood market pulp a year, bringing the overall pulp production at Bratsk to more than 1 million metric tons.

The project will transform the Bratsk mill into one of the world's largest and most modern softwood pulp facilities. It will completely modernize the entire Bratsk mill to be more competitive, with improved product quality and lower costs. The mill's products will be oriented toward the Chinese market.

Engineering and construction will commence immediately. The new pulp mill will start operating in the second half of 2012. The procurement of major equipment suppliers has already begun. The region will benefit from new taxes related to the construction activities, materials, and regional contactors. The project will completely modernize production and use latest technology to continue improving environmental performance.

"One of our key goals, and main reasons to create the JV [joint venture] with International Paper, was investment program implementation," said Zakhar Smushkin, chairman of Ilim Group's board of directors. "We have already finished building the world's largest neutral sulphite semichemical pulp mill in Koryazhma and invested in large-scale forest equipment in Siberia. We are now ready to start this new project at Bratsk, which will be the first new kraft pulp mill in Russia for 30 years. This investment at Bratsk will significantly improve the competitiveness of Ilim and the Russian forest, pulp and paper industry as a whole," Smushkin said.

"This strategic investment at Bratsk reinforces IP's commitment to Russia and will further strengthen our position as a supplier to China," said Maximo Pacheco, Ilim Group board member and president of International Paper Europe, Middle East, and Africa.