13 Sep 2007

Reducing newsprint capacity in Europe

Overcapacity within the European newsprint industry has resulted in the supply of newsprint exceeding demand. To counter this situation, Norske Skog has decided to curtail production of newsprint in Europe by 200 000 tonnes in 2008. In addition, curtailments of approximately 70 000 tonnes for the second half of 2007 is already under implementation.
A weaker market balance in combination with increased prices of important input factors such as recovered paper, wood and energy necessitates further measures to improve profitability.
'Norske Skog's economic results are not satisfactory and measures to improve profitability are essential. Acceptable earnings are a prerequisite to the development of Norske Skog as a strong and dynamic company,' says chief executive Christian Rynning-Tønnesen.
Corporate management in Norske Skog has decided curtailments of 200 000 tonnes European newsprint production in 2008. This corresponds to approximately 10 per cent of the company's total newsprint capacity in the region and will contribute to a better supply and demand balance. The company will be saving costs and in total this will provide a clear positive profit effect in 2008.
Studies indicate that the major part of the curtailments should be taken at Norske Skog Skogn and Norske Skog Follum in Norway, Reductions should also be taken at Norske Skog Parenco in the Netherlands and Norske Skog Golbey in France.
Corporate management has initiated a process, in cooperation with the management and employee representatives at each mill, to develop an overall production plan for 2008.

Oxenøen, 13 September 2007
Norske Skog
Corporate communications

Further information:

Vice president corporate communications
Tom Bratlie
Phone: +47 67 59 93 34
Mob: +47 905 21 904 
Financial market:
Vice president investor relations
Jarle Langfjæran
Phone: +47 67 59 93 38
Mob: +47 909 78 434