Mill Announces First 21st Century Paper Machine in Maine - August 29, 2005

Keith Van Scotter, CEO of Lincoln Paper and Tissue, LLC, announced today that the company has firm contracts in place for the purchase and installation of a new 100 TPD tissue machine at the Lincoln mill in 2006, which will add 40 jobs to the company's current 350 employees.  "I'm pleased to report that due to the strong support of our customers and the efforts of all of the Lincoln employees over the last year, the company is able to grow by installing the first 21st century paper machine in Maine", said Van Scotter.  He added, "This machine, the first in Maine in a generation and representing an approximately $36 million investment, will ensure the vitality of the Lincoln mill for years to come."  Van Scotter stated that customer demand for tissue parent rolls continues to grow, supporting the new machine's capacity, which will displace some market pulp made at the mill currently.  Existing fine paper and tissue production lines, enhanced by recent investments, will continue to produce products for Lincoln's existing customer base.

Van Scotter noted that strong customer support of the mill and the recent refinancing of the company made the expansion possible, and thanked the company's new investment partners, LaSalle Bank and Pacific Corporate Group for their recognition of the soundness of investing in the Lincoln mill.  He went on to say:  "This second phase in the investment plan for Lincoln, added to our initial investments in pulping, recovery, paper and tissue manufactuing, brings our new investment total to more than $41 million, since our restart in 2004.  Our customers, financial partners and executive team know that our mill with this machine is a winning combination.

A formal groundbreaking for the new machine is expected within the next 30 days.  The project will also provide an estimated 100 jobs during construction and installation.  The machine is expected to being operating during the third quarter of 2006.