Singapore; Montreal, Canada; Oslo, Norway - September 10, 2003 - Pan Asia Paper Co. Pte Ltd, a 50-50 per cent joint venture between Norske Skogindustrier ASA and Abitibi-Consolidated Inc., today announced the creation of a 65-35 per cent joint venture with Hebei Longteng Paper Corporation of China to build and operate a newsprint mill in the industrially developed Hebei Province of China, 280 km southwest of Beijing.

 

The name of the joint venture is Hebei Pan Asia Long-Teng Paper Co., Ltd. Construction of the mill will begin during the fourth quarter of 2003 and it is expected to start production during the third quarter of 2005 with a rated capacity of 330,000 tonnes per year. The newsprint will be produced from 100 per cent recycled fiber. The project represents an investment of approximately US$300 million.

 

"This will be one of the most cost-competitive mills in the world, built at a cost of less than US$1000 per tonne," said PanAsia Paper's President and CEO, Andre Van Hattum. "This project is completely in line with our strategy of expanding into a more local supplier. PanAsia Paper operates one of the world's most modern fleets of newsprint machines," added Van Hattum. "Its growth and profitability will enable PanAsia Paper to fund this project on its own, including its share of equity of around US$70 million, without any cash from its shareholders."

 

The project is ideally located in the greater Beijing metro area with its population of 100 million and high-anticipated growth rates. The creation of the joint venture in Hebei has strong support both from local and central authorities. Alain Croisetiere, formerly the Senior Vice President, Special Projects in PanAsia Paper, is Project/Managing Director for the new company.

 

"PanAsia Paper has been a success from the very beginning," says Norske Skog's President and CEO, Mr. Jan Reinås. "This new commitment in China gives us an even stronger position in the world's most interesting growth region. The project has low investment cost, and we are convinced it will add value to our shareholders. PanAsia Paper has today a 25 per cent market share in non-Japan Asia and markets paper that was delivered from a number of different companies just a few years ago. PanAsia Paper has already a strong position in China through Shanghai PanAsia Potential Paper, and this position will be further enhanced by the Hebei mill."

 

China has seen a rapid growth in newsprint demand in recent years. According to the Pulp and Paper Products Council demand has risen from 1.15 million tonnes in 1998 to nearly 1.8 million tonnes in 2002. Market outlook estimates an annual growth at close to 8 per cent until 2010.

 

"Abitibi-Consolidated has long viewed PanAsia Paper as our growth vehicle in the world's most promising regions. The Hebei mill is expected to sell 70 per cent of its production within a 500 km radius of the mill. PanAsia Paper is extremely well positioned to capture its share of the Chinese newsprint consumption growth from just under 2 million tonnes today to 3 million tonnes in 2008, when Beijing hosts the summer Olympics," said John W. Weaver, President and CEO of Abitibi-Consolidated.

Pan Asia Paper Co. Pte Ltd, headquartered in Singapore, is a leading Asian supplier of newsprint and other publication paper, with world-class production facilities: Jeonju and Chongwon in South Korea; Singburi in Thailand; and Shanghai in China. The aggregated capacity of PanAsia Paper's mills amounts to 1,320,000 tonnes of newsprint and 135,000 tonnes of other publication paper.

 

PanAsia Paper is also the sole distributor in the Asian Pacific region for its two equal shareholders, Abitibi-Consolidated Inc. and Norske Skogindustrier ASA and its affiliates. PanAsia Paper markets approximately a half million metric tonnes of newsprint and groundwood specialties from North America, Europe and Oceania.

 

PanAsia Paper employs approximately 2100 people and supplies products to nearly 20 countries.

Hebei Longteng Paper Corporation Ltd. is an investment company partly owned by each of Hebei Province, Shijiazhuang City and Zhaoxian County.

 

More information can be found on Abitibi-Consolidated Inc.'s web site www.abitibiconsolidated.com, Norske Skog's web site www.norske-skog.com, and PanAsia Paper's web site www.panasia.com.sg