Stora China III

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The Project is to build plantation-based integrated board and pulp mills at Beihai city in Guangxi, southern China. The mill will initially include a 450,000 tons per year state-of-the-art paperboard machine and pulp capacity of 900,000 tons per year, including necessary energy plant and auxiliary facilities. The project will be implemented in two phases, with the first phase of investment being the state-of-the-art paperboard machine and an integrated bleached chemical thermo mechanical pulp (BCTMP) mill. Following the completion of the first phase the second investment phase will comprise a kraft pulp production line. The board and pulp mills will be integrated with wood supply from self-managed eucalyptus plantations. The project currently operates 90,000 hectares of land and will continue to develop its plantation base until the conclusion of Phase II, with a possibility for expansion through further land leasing. The Project will serve the fast-growing market for liquid packaging board and other premium consumer board grades. _x000B_The Project is subject to regulatory approvals, the signing of final documentation and other customary conditions precedent. Construction at the industrial site will commence when the mentioned preconditions have been fulfilled, which is expected to occur latest in the beginning of 2014. Production of board is estimated to start early 2016._x000B_Stora Enso Pulp & Paper Asia AB (the “Company”), an existing holding company domiciled in Sweden, will implement the Project through three subsidiaries: two sino-foreign joint venture companies with 85% ownership by the Company and 15% ownership by Guangxi Forestry Group Co. Ltd., a state-owned company under the Guangxi provincial government; the third is the existing Guangxi Stora Enso Forestry Co., Ltd., to be reincorporated as a sino-foreign joint venture company with 95% ownership by the Company and 5% ownership by Beihai Forestry Investment & Development Company Ltd., a state-owned company under Beihai city government.