Smurfit Kappa Closing Facilities

Smurfit Kappa Group plc announced plans to cut its recycled containerboard capacity as part of its capacity management program.

SKG plans to permanently close 130,000 metric tons of less efficient containerboard capacity. It will also reduce 2008 production by up to 80,000 metric tons through market-related downtime.

SKG intends to permanently close its Valladolid recycled containerboard mill in Northern Spain the second quarter of this year. The Valladolid mill has an annual capacity of 130,000 metric tons. The closure will have the effect of reducing recycled capacity by 70,000 metric tons this year. The objective is to reduce operating costs and to maximize the continuing efficiency of our mill system.

In addition, SKG will take up to 80,000 metric tons of market-related downtime, most of which will be taken by the end of next month. The goal of the downtime is to optimize SKG’s supply-demand balance and to address an increase in inventory levels of recycled containerboard.