1. Challenges and Success Norwegian Brazilian Chamber of Commerce, February 25, 2003 Anne Marie Røyert, VP Finance South America Norske Skog in South America

2. 2 Headlines A global paper company with HQ in Norway World’s second largest producer of publication paper: –24 mills in 15 countries –Revenue (2002:) ~ NOK 24 billion/US$ 3.4 billion Strong growth since mid-nineties Liquid share, Market Cap ~ NOK 12 billion/US$ 1.7 billion Foreign ownership - 43%

3. 3 Where We Were 1990 Where We Are Today Strong Growth Through the Nineties Norwegian operations only Globally diversified - production in 15 countries on 5 continents Producer of a wide variety of forest products - publication paper 48% of revenue 3rd largest newsprint producer in Europe 1.3 million tonnes of publication paper capacity Market capitalization NOK 3.1 billionMarket capitalization NOK 12 billion (US$1.7 bln) 2nd largest newsprint and 3rd largest magazine paper producer globally Highly focused on publication paper - ~ 95% of segmented revenue 8.0 million tonnes of publication paper capacity

4. 4 Norske Skog Canada (30%) Pan Asia (50%) Europe - 100% The Three Waves in Norske Skog’s Expansion 1990: Norwegian operations only 1998 - 1999: Asia 1992 - 1996: Continental Europe 2000: Global South America (100%) Australasia (100%)

5. 5 World’s largest producers of publication paper Mill. tonnes Share of world’s capacity 14% 12% 13% 12% 7% Total world market approximately 60 million tonnes

6. 6 Background South America  Norske Skog and Klabin created a Joint Venture in March 2000  Newspaper production and intention of building a new newsprint paper machine in Brazil  A small team (2 persons) in Curitiba to take care of the interests of Norske Skog  Acquisition of Fletcher Challenge Paper made a big difference for us - announced in April 2000, effective from end of July same year  Additional two paper mills in SA - one in Chile and one in Brazil  Creation of a regional organisation for South America

7. 7 Norske Skog in South America PISA, Jaguariaiva, Brazil NS Klabin: Monte Allegre (50%) Bio-Bio, Concepcion, Chile We are by far the largest newsprint producer, capacity 450’ tonnes Next to Asia, world’s most interesting growth region Good profitability despite current weak market: –FY 01: 42.5% EBITDA margin –FY 02: 25,5% EBITDA margin Norske Skog Klabin JV will be terminated March 2003 –Several options for future development Publication Paper (2001): 2.5 mill. tonnes (incl. of Mexico)

8. 8 Challenges Establish an office Find a place to live Buy office equipment, e.g. pens and paper Get around in the city, where to eat Travel arrangements Speak the language Pay the bills Survive the bureaucracy without speaking the language Learn to live with lawyers as part of daily life Adapt to an 80 % social and 20 % business attitude Respect the differences in the way of behaviour

9. 9 Changes in Norske South America during the three years From a pure presence to a strong organisation Regional sales organisation for South America Full ownership of the Brazilian paper mill (Pisa) Concentration on core business, forests in Brazil sold Cleaning up of company structures (mergers) Establishing the understanding of repatriation of cash

10. 10 Spirit of Norske Skog Openness Honesty Cooperation

11. 11 Future presence in South America JV with Klabin will end in March and imports from Europe will serve the market Still plans for a new PM2 in Pisa Exciting situation with the currency - challenges all the way The regional responsible will still be a Norwegian - Vidar Lerstad