Meadow Lake Mechanical Pulp Inc.

January 17, 2007 15:42 ET

Meadow Lake Mechanical Pulp Inc.: Press Release

CALGARY, ALBERTA--(CCNMatthews - Jan. 17, 2007) - Meadow Lake Mechanical Pulp Inc. (the "Purchaser") is pleased to announce that the Court of Queen's Bench in the Province of Saskatchewan has provided court approval for the sale of the Meadow Lake Pulp Mill and other related assets by the Meadow Lake Pulp Limited Partnership to the Purchaser. The pulp mill and its related assets are located in Meadow Lake, Saskatchewan, Canada. The Purchaser anticipates moving forward to complete the transaction as soon as possible, subject to satisfaction of various closing conditions related to the transaction.

The Purchaser is indirectly related to the Sinar Mas companies. It is anticipated that the Sinar Mas Pulp and Paper Products division ("APP") will be providing technical expertise to the Purchaser in respect of future operations of the Meadow Lake Pulp Mill.

The Purchaser is excited about the opportunity of being able to expand its worldwide operations into Northern Saskatchewan and Canada. The Purchaser, with the help of APP and the Saskatchewan Government, believes that it has the operating expertise and available capital to successfully restore the economic viability of the Meadow Lake Pulp Mill operations.

ABOUT SINAR MAS

Sinar Mas was founded in 1960. It continually enhances its technical capabilities and expands its market globally through its ventures with companies in Japan, Korea, China, Taiwan, the Philippines, Thailand, Singapore, Australia, France, Germany, Belgium, the United Kingdom and the United States, and now Canada. The Group's dynamic growth is based on four core businesses: food and agribusiness, financial services, pulp and paper products; and real estate and property.

APP is one of the world's leading pulp and paper group of companies. The executive board of APP consists of experienced people in various fields and provides the backbone to its growth. APP has approximately 55,000 employees and currently markets its products to more than 65 countries and six continents. With current annual combined pulp, paper and packaging grades capacity of over 7,000,000 tons in Indonesia, it ranks number one in Asia, excluding Japan. In China, the company is considered as the largest pulp and paper producer, with 13 pulp and paper mills supported by more than 20,000 employees and 5 forestry holding companies with total assets of approximately US$4 billion. Gold Hai mill on Hainan Island, which began operating in 2004, is China's largest single line pulp mill.

Sinar Mas Forestry is the exclusive fiber supplier for APP's mills. As part of Sinar Mas, Sinar Mas Forestry manages sustainable fiber sources in Indonesia.

APP and its related entities are committed to purchasing wood fiber for pulp-making operations from sustainably-managed forestry sources, which conserve areas of outstanding habitat and operate in harmony with local communities. Key recent examples of these initiatives include:

1. APP implements a strict documented Chain of Custody (CoC) system to ensure the legality of its wood fiber supply. The proper functioning of this system is independently verified on a periodic basis. In 2005, a third-party verification audit was conducted by SGS (Societe Generale de Surveillance) for all of APP's active fiber sources under Sinar Mas Forestry in Sumatra, Indonesia. aPP's CoC system is improved continually based on the recommendations of its independent verification auditors. CoC audits within APP mills are conducted on a periodic and are based on per-product batch basis. The CoC and legal origin field audit for 2006 by SGS was completed in December.

It has been acknowledged that some interest groups have recently issued information concerning the development of natural, resources to ensure the sustainable supply of pulpwood for the pulp and paper industry in Indonesia. In response, a representative of the Government of Indonesia issued a statement:

"...Sinar Mas Forestry, one of the key players in forestry industry, has been conducting plantation forest development activities since 1983. The management of its plantation forest development incorporates the economic, social and environmental aspects in compliance with the laws and regulations of the Government of Indonesia, which are founded on sustainable forest management principles. To date, Sinar Mas Forestry, in collaboration with other stakeholders, has shown its strong commitment to developing the forest resources for the benefit of the nation."

The above statement was issued following a 'Sustainability Seminar', which was held in Tokyo, Japan on November 14th 2006. Further during the seminar, a representative of the Government of Indonesia also stated:

"...Having proactively fulfilled their legal commitment, APP and its fiber supplier have even gone beyond mere compliance, and have implemented dynamic conservation initiatives such as their collaborative efforts to develop the Sumatran Tiger Sanctuary and the Biosphere reserve in Riau Province. These initiatives demonstrate APP's extraordinary commitment to the long-term conservation of Indonesian forests, to the protection of our robust biodiversity for this and future generations and to sustainability as a whole."

In addition, APP has a formal policy that states it will respect the rights of indigenous communities. APP also recognizes that its commitment to sustainability in all operations is possible only if APP and Sinar Mas Forestry operations address improving the welfare of their employees and the local communities where they operate. In support of the policy of the Government of Indonesia, APP and Sinar Mas Forestry are focused on long-term community planning, economic empowerment of forest dwelling communities to increase welfare, education and employment opportunities.

To date, APP and Sinar Mas operations directly and indirectly support millions of families; most of whom live in remote villages and rural communities.

CAUTIONARY STATEMENT:

No regulatory authority has approved or disapproved the information contained herein. This news release may include certain "forward looking statements". All statements other than statements of historical fact included in this news release regarding forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

Contact Information

  • Meadow Lake Mechanical Pulp Inc.
    (Formerly 6551017 Canada Inc.)
    Investor Relations
    (403) 232-9500
    (403) 266-1395 (FAX)
    100, 400 - 3rd Avenue S.W.
    Calgary, AB T2P 4H2