Ilim Group allocates Rouble 310 million to increase power generation capacity at Bratsk mill, eastern Russia

ST PETERSBURG, Russia, July 11, 2011 (Press Release) - Ilim Group is completing the second stage of the Rebuild of Facilities for Preparation, Storage, and Feeding Wood and Bark Waste for Incineration project launched last year. The total cost of the work under the project exceeds RUR 310 million.

The key purpose of the project is to increase the Mill's power generation capacity through incineration of bark waste in bark boilers which will yield additional steam and electric power at the Mill. This will facilitate the reduction of third-party energy consumption.

Bark waste supply was planned using a state-of-the-art conveyor system. 600 m of belt conveyor was started up during the first stage in late 2010. The conveyor was extended by another 540 m in June 2011. The second stage of the project also includes installation of five belt conveyors feeding bark and saw dust to the bark boilers for incineration. This line will ultimately be connected to the conveyor installed at the first stage.

Project completion in late 2011 will facilitate annual power savings of up to RUR 50 million to significantly reduce finished product cost.

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OJSC Ilim Group was registered in St. Petersburg on September 27, 2006. In 2007, the Group was joined by Kotlas Pulp and Paper Mill, Bratsk Pulp and Board Mill, OAO Bratskcomplexholding and Ust-Ilimsk Timber Processing Complex as the mills were converted to a single share. On July 2, Ilim Group started its operations as a consolidated company. The strategic partner of Ilim Group is International Paper.

Ilim Group's business assets include the Company's Branches in Koryazhma (Arkhangelsk Oblast), Bratsk, and Ust-Ilimsk (Irkutsk Oblast) and the corrugated box plant in the Leningrad Oblast. Ilim Group includes forestry branches in the Bratsk and Ust-Ilimsk Districts and the Koryazhma Forestry Branch.