St Regis - The UK's largest manufacturer and recycler of paper

Press Release July 4th 2006

St Regis Invests To Strengthen Competitive Position

Increased productivity and enhanced product quality – these are the two most important objectives behind St Regis’ £30 million investment programme which began earlier this year and is set to run well into 2007.

There’s no disguising the fact that the paper business has been extremely challenging in the past year, not least because of surging energy prices which have led to mill closures throughout the industry. Nick Britton St Regis’ Sales and Marketing Director commented; “St Regis is progressing successfully through a period of change in difficult and turbulent market conditions. Our investments at St Regis are all designed to improve our competitiveness which means delivering better products more efficiently. We believe St Regis is well on course to consolidate its position as the UK’s foremost papermaker.”

Kemsley – one of Europe’s most cost-competitive paper mills

Kemsley Mill in Kent now accounts for 60% of St Regis’ paper production. £25 million is being invested on a rebuild of Kemsley’s PM3 and the installation of new pulp lines. The upgraded machine is capable of producing the highest quality plasterboard liner as well as enhanced versions of testliners such as Trident, the long established 100% recycled replacement for kraftliner.

PM3 has benefited from installation of three headboxes, an up-rated Stock Approach Screening System and additional drying cylinders. The investment also includes a dilution control on the middle ply box designed to improve the paper profile. Increased drying and process development will increase machine capacity by up to 50,000 tonnes.

The first phase of the up-grade at Kemsley was completed over a period of 21 days in June 2006. In fact, the machine was re-started ahead of schedule and was making saleable paper within six hours!

Customers have already reported a visible improvement in paper appearance and improved physical performance.

£5 million investment in Wansbrough Mill

Machine upgrades at Wansbrough Mill in Somerset earlier in the year are delivering the twin benefits of improved capacity and enhanced product quality on plasterboard liners, testliners and coreboard. The work has focused around introducing a new headbox with dilution control and wire shake unit. There have been modifications to the stock prep plant and the stock approach flow as well as installation of new process control systems and ASA sizing.

St Regis’ strategy is clear

Future success, especially in difficult market conditions, lies in offering customers higher added-value products manufactured with great consistency and cost-competitiveness. As well as investing in machine up-grades, St Regis has also been taking action to increase efficiencies in key areas such as logistics, sales and technical support.

The senior management team has recently been restructured to streamline reporting processes and allow for a more flexible approach to operating the business.

Operations Director, Chris Rosser, commented: "This rebuild represents the first stage of a £25M investment to support the development of products at Kemsley Mill and follows shortly after the successful £5M investment at Wansbrough Mill earlier this year. I am extremely pleased that the mill operational and divisional engineering teams managed to cope with a very demanding work load and achieve start up ahead of schedule. Everyone involved, including the numerous contractors who supported us through the rebuild, showed excellent commitment and worked extremely hard to achieve the deadline. The next stage of investment in additional stock preparation capacity is scheduled to come on steam next summer."

For more information contact:

Mike Churchman 01628 639404

Editor’s notes:

St Regis is the UK’s largest manufacturer and recycler of paper.

With four paper mills and a Head Office in Maidenhead, our turnover is more than £300 million per annum. We employ c.1700 people.

Our annual output of recycled paper is in the region of 1.2 million tonnes, making us by far the largest papermaker in the UK. The annual input of recovered waste paper is around 1.3 million tonnes, which means we are one of the biggest recycling operations in Europe. In fact, a major environmental benefit of K-light’s launch is that recycling on the Kemsley site will increase by over 30%. The high quality recovered paper will be supplied by Severnside, part of the DS Smith group.

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