Smurfit Kappa to develop German containerboard mill operations

DUBLIN, Ireland, Nov. 27, 2009 (Press Release) - Smurfit Kappa Group plc (‘SKG' or the ‘Group') today announced its intention to invest in two of its European paper machines to increase operating efficiency and to focus on higher growth grades.

SKG will upgrade its 290,000 tonne 'PM2' containerboard machine at its Hoya Mill in Northern Germany. The investment will increase the capacity of the machine by 130,000 tonnes bringing total machine capacity to 420,000 tonnes by 2012 / 2013.

PM2 at Hoya is a 7.5 metre wide containerboard machine that currently manufactures testliner and fluting. Following the investment programme, the machine will become a world-class, dedicated lightweight containerboard machine to better reflect SKG's current and expected paper requirements.

The investment is expected to significantly lower overall operating costs making the machine one of the most efficient in Europe. The investment programme is scheduled for completion in 2012 / 2013.

During the same period the Group will also focus its 220,000 tonne containerboard machine at its Wrexen mill in Central Germany towards the production of whitetop testliner. Whitetop grades have the highest current and expected growth characteristics of all containerboard grades.

The 5.0 metre paper machine will remove in the first instance approximately 100 000 tons of brown testliner / fluting in order to generate capacity in whitetop where SKG is currently a substantial net buyer.

The total cost of this capital programme is within the scope of SKG's stated capital expenditure plans. The investments will be phased over 2010 to 2013.