Marked Drop in Sales - Paper Grades Different

DÜSSELDORF, German, February 24, 2010 - Sales in the German paper industry fell considerably by 16 per cent to
12.5 billion Euros in the crisis year 2009 . The paper industry has now come
out of the trough and the contract situation is improving markedly. Only a
few companies failed to survive in year 2009, said Dr. Wolfgang Palm,
president of the German Pulp and Paper Association (VDP) at the annual press
conference of the association. He added that because of rising costs
companies were being forced to adjust prices to safeguard jobs.

Overall production and sales had fallen in 2009 by 8 per cent to around
21 million tons, but it would be several years before the industry attained
the pre-crisis level again, said Palm. There were great differences in the
way the various paper grades were faring. While the sales of packaging paper
and cardboard had more or less stabilised with a decline in sales for the
year of about 3 per cent, the surplus capacities in graphic papers were being
clearly felt. The market for magazines and newspapers was still weak and
sales there were down 14 per cent. The manufacturers of hygiene paper had
been barely touched by the crisis. Most manufacturers of technical and
special papers had suffered from the 13 per cent drop in sales, although
their order situation had improved considerably.

The German paper industry produces 21 million tons of paper and is still
the fourth largest paper industry in the world. Moreover, it has consolidated
its top position in Europe and enjoys a market share of 24 per cent. A good
43 per cent of production is exported, 65 per cent to Western Europe and 23
per cent to Eastern Europe.

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