<B>APP Buying Canadian Pulp Mill</B>

Asia Pulp and Paper entered a Purchase and Sale Agreement for the purchase of the 420,000 air dried metric ton capacity Northern Bleached Softwood Kraft Pulp Mill located in Castlegar, B.C., Canada.

The seller of the Pulp Mill is KPMG Inc., in its capacity as Receiver of Stone Venepal Pulp Inc. The sale and purchase is subject to regulatory approvals in Canada. Management of APP believes the acquisition will be beneficial to the APP Group in that it will provide a secure and reliable source of raw materials thereby more fully integrating APP's operations.