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MERCER BEGINS FEASIBILITY STUDY ON WORLD-CLASS GERMAN RECYCLING FACILITY

                   MERCER BEGINS FEASIBILITY STUDY
              ON WORLD-CLASS GERMAN RECYCLING FACILITY
    VANCOUVER, British Columbia, July 14 /PRNewswire/ -- Mercer International Inc. (NASDAQ-NMS: MERCS) and its affiliates today announced that the company has reached a preliminary agreement with Vereinigte Zellstoffwerke Pirna, GmbH to convert its sulphite pulp mill located in Pirna, Saxony, Germany to a recycling facility.  The new facility will produce bleached pulp and tissue grade stock using environmentally friendly hydrogen peroxide, with estimated output of 400 to 500 metric air dry tons per day.
    Based upon preliminary studies, Mercer estimates that the plant will generate revenues of approximately $105 million, in its first year of operation, with a projected return on investment of 27 percent.  The estimated capital costs of the project are $100 million of which $20 million will be equity and $80 million in a combination of government grants and non-recourse debt.
    Mercer anticipates the signing of a formal purchase agreement within three months after completion of its feasibility study.  The feasibility study is being undertaken by NLK-Celpap Inc., one of the United States' leading pulp and paper consulting firms.  It has considerable expertise in the conversion process and considers this project to be of world-class status.
    The German government recently announced its policy regarding recycling packaged goods, including paper and cardboard.  It has mandated that by January 1993, more than 50 percent of all consumer packaged goods will require recycling.  The recycling average will climb to 80 percent by mid-1995.  The proposed project would be the largest recycling facility in Saxony and would serve the increasing demands for recycled fiber in Europe.  Initial estimates indicate that the use of existing equipment will save in excess of $100 million compared to building a new facility.
    The existing plant operated as a market pulp producer from 1906 to 1990.  In 1988, a $100 million upgrade of the facility was completed.
    Mercer International Inc., a North American-based company, is utilizing its asset base to expand its service-oriented focus into long-term, high-growth areas, with particular emphasis on the international environmental services industry.  The company has total assets of more than $162 million, with annual revenues of more than $70 million and earnings of $8.5 million in fiscal 1991.
    -0-                     7/14/92
    /CONTACT:  William H.W. Atkinson of Mercer International, 604-683-8286; or Gary S. Maier of Erickson Consulting Group, 310-829-4601, for Mercer International/
    (MERCS) CO:  Mercer International Inc.; Vereinigte Zellstoffwerke Pirna, GmbH ST:  British Columbia IN:  PAP SU: KJ-EH -- LA005 -- 8935 07/14/92 08:31 EDT
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Publication:PR Newswire
Date:Jul 14, 1992
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