Kruger Invests CAD 200 Million in a Deinking Plant at its Trois-Rivieres Mill

Trois-Rivieres, Quebec, Canada, 23 February 2007 -- /PRNewswire/ -- Kruger Inc. today announced, with Jean Charest, Premier of Quebec, and Joseph Kruger II, chairman of the board and chief executive officer of Kruger Inc., that it will invest CAD 200 million at its Trois-Rivieres mill to build a deinking plant with an annual capacity of 342,000 metric tons. This project will position Kruger as the North American leader in the manufacture of publication papers with a high recycled fiber content.

Environmental Benefits:

- Recycling by Kruger of an additional 422,000 MT/year of recovered
paper, the equivalent of the entire annual Quebec consumption of
newsprint and specialty printing papers, for a total of 1,122,000 MT
per year of paper and board. Thanks to this increase in its recycling
capacity, Kruger will be the number-one recycler in Quebec and one of
the largest recyclers in North America.

- 46 MW reduction of energy consumption, i.e. a 20% less than the mill
currently uses or the energy required to supply 24,000 households.

- A reduction in virgin fiber consumption of 200,000 MT/year of chips and
229,000 m3/year of roundwood.

Bernard Routhier, executive vice president and chief operating officer of Kruger, emphasized that this project will allow the company to improve its competitive position while offering its customers papers with high recycled fiber content. "Almost half of the fiber currently being used in our mills' manufacturing processes is recycled. This project, in addition to our other recent initiatives, allows us to improve our environmental balance sheet even more," says Routhier.

This CAD 200 million investment was made possible thanks to a CAD 20 million nonrefundable contribution from Investissement Quebec. The project also meets the eligibility criteria of Hydro-Quebec's Plant Retrofit Program - Major Customers (PAMUGE) for energy efficiency, i.e. a contribution of CAD 30 million. Lastly, Investissement Quebec contributed a CAD 50 million loan.

The project will create 200 full-time jobs with a total payroll of CAD 50 million during construction, while purchases of goods and services are estimated to be CAD 125 million.

The deinking plant will use a new technology to produce two grades of pulp that can be used to manufacture newsprint as well as super-calendered and coated papers. This pulp will entirely replace groundwood pulp, and will be used to produce value-added papers with recycled fiber content.

The project will be carried out over about 32 months.

Founded in 1904, Kruger Inc. is a major producer of publication papers, tissue, lumber and other wood products, corrugated cartons from recycled fibers, and green and renewable energy. The company is also a leader in paper and paperboard recycling in North America. It recently continued its expansion in the retail sector with the acquisition of the Maison des Futailles, a leading winemaker, bottler, and marketer of wines and spirits. Kruger operates facilities in Quebec, Ontario, Alberta, British Columbia, Newfoundland, and Labrador, and in the United States and the United Kingdom, and has 10,000 employees.

Source: Kruger, Inc.