Neenah Paper, Inc. helps K-C focus on health, hygiene

DALLAS, TX- BASED Kimberly-Clark Corporation (K-C) is spinning off Neenah Paper, its fine paper business, Technical Paper, its specialty paper business, and its pulp and timber operations in Canada to create a new publicly traded company called Neenah Paper, Inc. The units’ combined 2003 net sales were about $665 million.

The spin-off will take the form of a tax-free distribution of 100% of the new company’s
common stock to K-C shareholders, with completion late in 3Q04 or early in 4Q04, subject to market, regulatory and other conditions.

K-C will be one of Neenah’s largest customers through a long-term pulp supply agreement. Following the spin-off, K-C will produce only about 10% of its worldwide virgin fiber requirements.

About Neenah Paper, Inc. The new company, listed on the NYSE under the ticker symbol “NP”, will be headquartered in Alpharetta, GA, and have five manufacturing facilities in the US and Canada producing fine and technical paper grades and about 700 000 tonnes of pulp annually. It will have about 2,100 employees and rights to harvest wood from 5.9 million acres of Canadian timberlands.

Fine Paper manufactures premium writing, text, cover and specialty papers. Its brands include CLASSIC, CLASSIC CREST, ENVIRONMENT, NEENAH and UV/ULTRA II. Net sales in 2003 were about $200 million. There are about 520 employees and manufacturing facilities are in Neenah and Whiting, WI. K-C acquired the business in 1956. Technical Paper produces durable, saturated and coated base papers for uses such as tapes, labels, abrasives, medical packaging and heat transfer products. The 2003 net sales were about $120 million. There are about 350 employees and a manufacturing facility in Munising, MI. K-C acquired the business in 1952.

Pulp mills in Pictou, Nova Scotia, and Terrace Bay, Ontario, also have related timberlands. In 2003, revenues were about $365 million. The Pictou mill began production in 1967. It comprises single-line pulp facility, as well as one million acres of owned and 200,000 acres of licensed or managed timberlands in Nova Scotia. The operation primarily produces softwood pulp, and is on the coast, near New Glasgow. In 2003, Pictou produced about 250 000 tonnes of bleached kraft pulp, about 90% of which was used to make K-C products, including less than 1% consumed by the fine paper and technical paper businesses. The Pictou operation employs about 350 people. K-C acquired the business in 1995 as a result of its merger with Scott Paper Company.

The Terrace Bay softwood/hardwood pulp mill was built by K-C and began production in 1948, supplying pulp to customers in the US and Canada. It has non-exclusive rights to harvest about 4.7 million acres of land owned by the Province of Ontario. In 2003, it produced about 450 000 tonnes of pulp, 90% of which was consumed within K-C, including about 12% which was used to make fine paper and technical paper products. The operation employs about 920 people and is situated on the north shore of Lake Superior. www.kimberly-clark.com. PI

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