Creation of 60 new jobs

  CRABTREE (QUEBEC - CANADA), Nov. 18 /PRNewswire/ - Quebec Premier Mr.
Bernard Landry, the Chairman and Chief Executive Officer of Kruger Inc., Mr.
Joseph Kruger II, and the Executive Vice President and Chief Operating Officer
of Scott Paper -- a Kruger Company -- Mr. Donald Cayouette, today announced a
116.4 million dollar investment in the Scott Paper mills in Crabtree and
Lennoxville. Investissement Quebec will participate in this project with a
contribution of 11.1 million dollars, refundable under the FAIRE program.
Innovation-Papier will also participate with a non-refundable contribution of
16.6 million dollars, which is the equivalent of 15% of the eligible capital
expenditures in this program. The investment project will create 60 new jobs
and will secure the existing 636 jobs at these mills.
    Premier Landry emphasized the importance of the Kruger Company to Quebec.
"Quebec has a world-class industry that is continually evolving with regard to
sustainable development and which is a source of pride for all of us. Kruger's
major investments over the years reflect the dynamic nature of this company
whose activities produce significant spin-offs in many regions of Quebec."
    "These investments are essential for Scott Paper to retain its privileged
position among the manufacturers in North America", explained Mr. Joseph
Kruger II, Chairman and Chief Executive Officer of Kruger Inc. "They will
allow the Eastern Canada Manufacturing Division to improve its competitive
edge in the highly competitive tissue product market. With these investments,
Scott Paper will be able to reduce its manufacturing costs, increase
production by acquiring new state-of-the-art equipment, and improve the
quality of its products, while maintaining its position as a major employer in
Lanaudiere," Mr. Kruger added.
    The upgrading program at the Crabtree mill includes the installation of a
new paper machine and two winders for hygienic paper, automation of one
wrapping line for finished product cases, and the addition of a new robotized
line for unitization of the cases. The upgrading of No. 5 paper machine in
Lennoxville includes the addition of a new wet end. Employee training programs
are also planned.
    The upgrading program at the Crabtree mill includes the installation of a
new paper machine and two winders for hygienic paper, automation of one
wrapping line for finished product cases, and the addition of a new robotized
line for unitization of the cases. The upgrading of No. 5 paper machine in
Lennoxville includes the addition of a new wet end. Employee training programs
are also planned.
    These investments will meet the future needs of the Canadian market by
making innovative products of superior quality. In addition they will enable
Scott Paper to intensify its efforts to increase its share of the American
market. "Scott Paper has acquired ownership rights for the "White Cloud"
trademark and has reached an agreement for the exclusive use of this brand
with the giant Wal-Mart USA", announced Mr. Donald Cayouette, Executive Vice
President and Chief Operating Officer for Scott Paper. "With our new
facilities we will be able to produce a good part of Wal-Mart USA's
requirements and they will serve as our anchor point in the United States", he
added. Mr. Cayouette also called attention to the commitment of the employees
who have signed a collective agreement for the period of 2001 to 2006 and who
agreed to extend this collective agreement up to 2009 if the company invests
in the Crabtree mill.
    Work will be completed in the summer of 2003. The project will require a
total of 60 000 hours of engineering and 250 000 hours of construction, if we
include management of the various projects totaling $116.4 million. At the
peak period, 300 people will be working on the construction sites.

    Scott Paper is Canada's leading tissue manufacturer serving the Canadian
consumer market with well-known brands including Purex (Western Canada's
leading brand), Cottonelle (Eastern Canada's leading brand), ScotTowels,
Scotties, White Swan, Capri and Viva, as well as away-from-home products for
industrial and commercial use across Canada. Scott Paper, which was acquired
by Kruger Inc. in 1997, represents approximately 40 percent of total installed
Canadian tissue manufacturing capacity and has facilities in Calgary and New
Westminster, B.C. as well as in Crabtree, Hull and Lennoxville, Quebec. Scott
Paper employs 1,700 people.

    Kruger is a major pulp and paper company engaged in the manufacturing and
sale of newsprint, groundwood specialty paper, lightweight coated paper,
directory paper, tissue, recycled linerboard, corrugated containers, lumber
and wood products. The company has operations in Quebec, Ontario, Alberta,
British Columbia and Newfoundland, the United States and the United Kingdom
and employs over 10,500 people.

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