SWEDISH SUPREME COURT REJECTS VALLVIK MILLS PETITION IN ENVIRONMENTAL CASE

The Swedish Supreme Court has rejected a petition by pulp producer Vallviks Bruk AB, part of the Rottneros Group, for leave to appeal against a ruling made by the Environmental Rights Court of Appeal on 20 May this year. That ruling overturned a November 2001 ruling by Östersund Environmental Court concerning discharges to water from Vallvik Mill. The Environmental Rights Court of Appeal overturned the ruling on appeal by the Swedish Environmental Protection Agency.

The Supreme Court’s decision means that Vallvik Mill must put biological purification into operation by 31 December 2005.

“Naturally we are surprised at this rejection by the Supreme Court,” says Rottneros’ CEO Lars Blecko. “An extensive investment programme in line with the Environmental Court’s judgement is already under way. A large proportion of the planned measures have been taken over the past year and will already have a positive effect on the environment in 2003 and 2004.

“Although we feel that the purification will be satisfactory once the measures in progress are fully implemented, naturally we will respect the Supreme Court’s decision. However, the financial consequences for Vallvik Mill are considerable. Meeting the requirements in the ruling by the Environmental Rights Court of Appeal will cost SEK 80 million on top of the environmental improvement measures that have already been implemented over the past year,” states Lars Blecko.

“Naturally the costs will affect the profitability of a mill in a sector currently in deep recession. We now have to consider how any additional costs can be balanced.”

Upplands Väsby, Sweden, 27.10.03

Lars Blecko

President and CEO

Further information: Lars Blecko, President and CEO, +46 (0)70-641 4910

Rottneros is one of the world’s leading independent manufacturers of market pulp. The Group consists of the parent company, Rottneros AB, which is listed on the Stockholm Stock Exchange, along with its subsidiaries of Rottneros Rockhammar AB, Utansjö Bruk AB and Vallviks Bruk in Sweden as well as Rottneros Miranda, S.A. in Spain, with activities involving production and sales of market pulp, Rockhammar Timber AB, which produces and sells sawn timber, plus the raw materials purchasing company of Rottneros Baltic SIA in Latvia. The Group has a total of 864 employees and a turnover of approximately SEK 2.5 billion.