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Cellulose Fibers Our cellulose fibers (pulp) products are distributed through a global direct sales network, and liquid packaging products are sold directly to carton and food product packaging converters in North America and Asia. We also have a 50 percent interest in North Pacific Paper Corporation (NORPAC) – a joint venture with Nippon Paper Industries that produces newsprint and high brightness publication papers. What We Do • We are one of the world’s largest softwood market pulp producers. • We provide cellulose fibers for targeted specialty markets, working closely with our customers to develop unique or specialized applications. • We manufacture liquid packaging board used primarily for the production of containers for liquid products. • Our joint venture, NORPAC, makes high-quality newsprint and high brightness publication papers. NORPAC activity is not included in the information that follows. Cellulose Fibers Products 
Where We Do It We have four pulp mills in strategic locations in the southern part of the U.S. and one pulp mill in Canada. Our liquid packaging mill and our NORPAC joint venture newsprint manufacturing facility are located in Washington state. Principal Manufacturing Locations Broken out by major product, locations of our principal manufacturing facilities are: • Pulp – U.S. – Georgia, Mississippi, and North Carolina – Canada – Alberta • Liquid Packaging Board – U.S. – Washington Summary of 2007 Cellulose Fibers Capacities 
Five-Year Summary of Cellulose Fibers Production(1)(2) 
How Much We Sell Revenues of our Cellulose Fibers segment come from sales to customers who use the products for further manufacturing or distribution, and for direct use. In 2007, our net sales were approximately $1.8 billion compared with $2.0 billion in 2006. Five-Year Summary of Net Sales for Cellulose Fibers(1)(2)  Five-Year Trend for Total Net Sales in Cellulose Fibers(1)(2) 
Percentage of 2007 Net Sales in Cellulose Fibers 
Pulp Volumes Our sales volume of cellulose fiber products in 2007 was 2.1 million tons – a decrease of 21 percent compared with 2006 due to the divesture of five production facilities during the year. Factors that affect sales volumes for cellulose fiber products include: • growth of the world gross domestic product; and • demand for paper production and diapers. Five-Year Summary of Sales Volume for Cellulose Fibers(1)(2) 
Pulp Prices Our pulp prices in 2007 increased compared with 2006 due to: • the relative weakness of the U.S. dollar; • level of demand; and • the world economic environment. Five-Year Summary of Selected Published Pulp Prices – $/TON  Where We're Headed Our strategies for achieving continued success include: • focusing our Cellulose Fibers businesses on value-added pulp products; • focusing research and development resources on new ways to expand and improve the range of applications for cellulose fiber, including chemically modified fibers to enhance performance and on new product opportunities for liquid packaging and newsprint; • providing our customers with access to our technical expertise; • improving our cost-competitiveness through operational excellence and noncapital solutions; and • focusing capital investments on new and improved product capabilities and cost-reduction opportunities. |