– Demand for our uncoated fine paper has increased, especially in Germany, France and Belguim. This type of paper is used mainly for books and brochures, says Olle Grundberg, CEO of Arctic Paper.

Arctic Paper sold 205,000 tonnes of uncoated paper during the first six months of 2008. This is a volume increase of 7 per cent and a sales value increase of 13 per cent, compared to the same period in 2007. Production takes place at the mills in Munkedal (Sweden) and Kostrzyn (Poland), and represents about three quarters of Arctic Paper’s total production.

The sales volume of coated fine paper, which makes up the remaining 25 per cent of Arctic Paper’s production, totalled some 71,000 tonnes during the first six months of 2008. The volume increase was 12 per cent and the sales value increase was 12 per cent, compared to the same period last year. Production takes place at the mill in Håfreström (Sweden). Tough price competition for coated fine paper and increased energy costs affected profitability negatively in Håfreström.

Arctic Paper’s total sales volume during the first six months of 2008 totalled 276,000 tonnes, an increase of 8 per cent compared to the same period in 2007. The sales value increased 13 per cent, to 2,020 million SEK (c. 217 million Euro).

Total sales for 2007 totalled 3,640 million SEK (c. 391 million Euro), which corresponds to a volume of 505,000 tonnes of fine paper. After a period of increasing negative results, Arctic Paper reversed the trend and presented a positive result for 2007. The after-tax group profit for 2007 totalled 20,4 million SEK (c. 2,2 million Euro).

– Generally the industry has small margins. The prices of fine paper have fallen in recent years but are now stabilising. The increases in energy prices are a concern, and we are implementing measures to reduce their effects, for instance we are investing 150 million SEK (c. 16 million Euro) in an expanded energy facility for gas in Kostrzyn. The expansion means the mill will generate more electrical energy than it requires itself, says Olle Grundberg.

– The competition is extremely tough and new actors are making their entry from Asia, the United States and Canada. Our biggest competitive advantage is our products and our strong brands that we are continually developing to meet the needs of the market.

In all, approximately 10 million tonnes of woodfree uncoated fine paper and 8 million tonnes of woodfree coated fine paper are consumed in Europe. The market for fine paper is growing by 1-2 per cent per year.

Arctic Paper’s largest markets are Germany, Poland, the UK, France and Sweden. Roughly 50 per cent of the production is supplied to these countries. Customers include printers, wholesalers, book publishers, advertising agencies, design studios and end users. Graphic fine paper is used mainly for books, printed matter and profile packaging.

For more information: Olle Grundberg, CEO of Arctic Paper, mobile: +46 (0)706-54 44 20, e-mail: olle.grundberg@arcticpaper.com, Hans Karlander, Sales and Marketing Director, telephone:

+46 (0)31-63 17 08, e-mail: hans.karlander@arcticpaper.com

www.arcticpaper.com

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