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2002-01-10

Holmen's new paper machine

Pre-project starts in Spain

Holmen's Board has decided, on the basis of the decision in principle
made in April 2001, to move ahead with a pre-project for a new newsprint
machine in Spain. The intention is to build the machine at Papelera
Peninsular, Holmen's newsprint mill in Fuenlabrada, 17 kilometres south
of Madrid. This means that the Braviken Paper Mill in Norrköping, which
was studied parallel to Papelera Peninsular as a possible location, is
at present no alternative.

Holmen's Board has had to decide between two sound, profitable
alternatives. The decision in favour of Spain is based on market
strategic factors. An increase in capacity there is believed to be most
favourable to the Holmen Paper business area's overall development just
now.

The final decision of the Board is expected in the second half of 2002
once the necessary operational permits have been obtained and the
necessary agreements reached with the authorities. The cost of the new
machine, which will have a capacity of 350,000 tonnes per year, is
estimated at EUR 400 million. The machine will start production by the
beginning of 2004 at the earliest. It will be Holmen Paper's tenth paper
machine, and will raise total newsprint and magazine paper capacity to
more than two million tonnes per year.

The investment is fully in line with Holmen's strategic direction, which
is to concentrate on growth and development within newsprint and
magazine paper. The machine will be dedicated to the production of
standard newsprint. However, the total additional volume will also be
allocated to other product areas within the newsprint and magazine paper
segments, by redistributing production on existing paper machines. The
process will also include devoting substantial resources to the
development of new products in the lightweight-coated magazine paper
segment. The net addition of standard newsprint capacity will be in the
region of 180,000 tonnes per year.

Papelera Peninsular was brought into production in 1998 and was acquired
by Holmen in July 2000. The company includes a newsprint mill with one
paper machine, a waste paper recovery operation, and a power plant.

For further information please contact Göran Lundin, President and CEO
of Holmen, on +46 8 666 21 00,
or Magnus Hall, President of Holmen Paper, on +46 11 23 50 00.



The Holmen Group

Holmen is a forest industry group that manufactures printing paper, paperboard and sawn timber and runs forestry and energy production operations. The company’s extensive forest holdings and its high proportion of energy production are strategically important resources for its future growth.

Holmen AB

Tel: 08-666 21 00

E-post: info@holmen.com

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