American Israeli Paper Mills Approves Investment in Paper Machine

Hadera, Israel, 20 November 2006 -- /PRNewswire/ -- American Israeli Paper Mills Ltd. (AIPM), announced that the board of directors approved yesterday an investment of approximately USD 140 million in a project setting up a new packaging paper machine for the production of packaging paper from recycled paper and board. The new machine, to be installed at the company's facility in Hadera, will have a capacity of approximately 230,000 tons per annum.

After the installation of the new packaging paper machine, planned to start production in 2009, and the shut down of one of the two machines working today, the capacity of the company in packaging paper will increase from approximately 150,000 tons per annum to approximately 330,000 tons per annum. The new machine should provide a high quality and cost-competitive solution to the ever-growing demands of the local market, in comparison to the solutions provided by the imported competition.

The company expects that the planned significant increase in its paper production, based on the existing infrastructures, will improve its profitability for the long run.

The company hasn't decided yet regarding the financing of the project and is reviewing different alternatives.

Source: American Israeli Paper Mills Ltd.