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Mercer to Curtail 20,000 Metric Tons of Production at German Mills in December
New York, New York, USA, 28 November 2006 - /PRNewswire/ -- Mercer International Inc. (NASDAQ:MERC)(NASDAQ:TSX:)(NASDAQ:MRI.U) announced today that it will curtail production at its German pulp mills by approximately 20,000 metric tons in December 2006 because of fiber limitations due to under-delivery of anticipated supply. Mercer is importing additional fiber to Germany and currently expects, subject to weather conditions, that its mills will return to full production in January of 2007.

The current fiber limitations result primarily because Germany's 2006 harvest levels were insufficient to correct the imbalance of wood supply created by low harvest levels during the very severe winter conditions in Central Europe at the start of the year, increased competition for fiber from the energy sector, and exports to other countries.

Jimmy S.H. Lee, president and chairman, said, "We believe it is prudent to curtail production in December so that our German mills can build some fiber inventory going into the new year in the event of seasonal weather disruptions to our supply. We are taking this measure as, unfortunately, German state and federal governments and private forestry organizations have not yet reacted to sufficiently rebalance the wood supply as a result of low harvesting levels during last winter and the increased wood demand from the energy industry. Further, the governments' biased promotion of wood for energy production has further aggravated the situation. As a result, there has been considerable upward pressure on fiber prices without a corresponding increase in supply available with under-delivery, in certain cases, of contracted amounts from the State forests and other suppliers."

Lee added, "We hope that this problem will be better addressed in the coming year by all levels of government in Germany and that corrective measures will be taken to increase the level of wood harvesting to better rebalance the wood supply."

Lee concluded, "We currently expect our German mills to return to full production at the start of the new year."

Mercer International Inc. is a global pulp manufacturing company. To obtain further information on the company, please visit its web site at http://www.mercerint.com/.

Source: Mercer International Inc.

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