International Paper and Fibria Agree to Paper Machine Option Extension

MEMPHIS, Tenn., Dec. 16  /PRNewswire-FirstCall/ -- International Paper (NYSE:IP) and Fibria (formerly Votorantim Celulose e Papel) have agreed to extend IP's option to build a second uncoated freesheet paper machine at the Tres Lagoas mill site.  This option, which would have expired on Jan. 31, 2010, has been extended until Jan. 31, 2013.

(Logo:  http://www.newscom.com/cgi-bin/prnh/20020701/IPLOGO )

In 2006, IP entered into a 90-year agreement in which Fibria agreed to furnish pulp and certain utilities to IP's co-located paper mill for the production of up to 250,000 tons of paper annually.  The agreement also granted IP the option to build a second paper machine and to be provided with certain utilities and pulp to produce up to an incremental 250,000 tons of paper annually.

The three-year extension is the only change to the original agreement.  If IP were to exercise this option, the second paper machine would need to begin production between Jan. 31, 2014, and Jan. 31, 2015.

This agreement to extend the option, which is aligned with the business strategies of both companies, will allow more time for the completion of all technical and commercial analyses, and will provide greater flexibility to start up the second machine in line with Latin American market demand growth.

About International Paper

International Paper (NYSE:IP) is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the company's North American distribution company. Headquartered in Memphis, Tenn., the company employs approximately 58,000 people in more than 20 countries and serves customers worldwide. 2008 net sales were approximately $25 billion. For more information about International Paper, its products and stewardship efforts, visit http://www.internationalpaper.com/.

This press release may contain forward-looking statements. These statements reflect management's current views and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. For example, our decision to extend this option may imply that we intend to exercise the option at a future date.  However, any decision to exercise this option will be made at a future date, after considering many factors, including the supply and demand outlook for uncoated freesheet in Latin America. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Other factors that could cause or contribute to actual results differing materially from such forward looking statements are discussed in greater detail in the company's Securities and Exchange Commission filings. 

http://www.newscom.com/cgi-bin/prnh/20020701/IPLOGODATASOURCE: International Paper



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