Papcel awarded Euro 22.7M contract for delivery and reconstruction of PM for Russian producer Mayak-VEGA

LITOVEL, Czech Republic, July 25, 2011 (Press Release) - Based on many years of successful cooperation with our significant customer- company Mayak, PAPCEL concluded with this customer big contract at the end of June, 2011. The main subject of the contract is delivery and reconstruction of the paper machine. The total volume of the contract is EUR 22.7 mil. PAPCEL will supply to the joint venture Mayak-VEGA paper machine which will be produced simplex and duplex fluting, liner. PAPCEL will also provide a complete reconstruction. The machine should produce also a plasterboard in the future. The machine can produce sizes up to 2.65 m. The paper machine for the joint venture will be delivered from the Italian company Alce SpA, Lucca.

PAPCEL will also supply a new line for recycled paper processing with output 230 tons/day. Another equipment that PAPCEL is going to deliver is the film press. It is our first delivery of this equipment to Russia. The scope of contract is also delivery of the second screen and reel. PAPCEL is going to provide basic engineering services, detail engineering, disassembly, assembly and will arrange civil engineering.

Dismantling work at company Alce in Italy will start in the middle of August 2011. Deliveries to Russia will be finished by the end of 2011, completion of civil engineering in Russia is planned for Q1 2012. Guarantee tests will be held until the end of 2012. Financing of the project is ensured by Russian Sberbank, Insurance of the project will be ensured by EGAP.