Schweitzer-Mauduit Announces Plans for European LIP Production Sites

May 3, 2010

ALPHARETTA, Ga., May 3 /PRNewswire-FirstCall/ — Schweitzer-Mauduit International, Inc. (NYSE: SWM) today announced plans to establish European production sites to produce cigarette paper for lower ignition propensity (LIP) cigarettes as well as customer supply agreements for LIP products.

The Company is establishing capacity to produce its proprietary Alginex® LIP cigarette paper in up to three European locations in advance of European Union (EU) regulations requiring cigarettes to be LIP compliant, which are expected to become effective during 2011. The three locations will include an already established third-party manufacturing facility in Belgium, a new wholly-owned operation in Lodz, Poland and a potential third operation at SWM’s paper manufacturing facility, Papeteries de Mauduit, located in Quimperle, France. The Lodz facility, to be called SWM-Poland, is expected to be the main production center of LIP solutions for the Company in Europe and can be readily expanded in capacity beyond the initial planned level. It is projected to be operational in November 2010 upon completion of equipment installation and building modification investments totaling approximately $25 million, which will be funded from existing credit facilities and available cash. Schweitzer-Mauduit’s planned EU LIP capacity is expected to meet up to one-half of EU market requirements and the Company has already secured LIP supply agreements which will utilize approximately 30% of this capacity.

Schweitzer-Mauduit is in advanced discussions with several multinational cigarette companies regarding their EU LIP cigarette paper requirements. It is expected that the remaining capacity will be fully committed through additional customer agreements during the course of 2010. Additionally, Schweitzer-Mauduit recently renewed two existing multi-year LIP supply agreements for North American customers.

About Schweitzer-Mauduit International

Schweitzer-Mauduit International, Inc. is a diversified producer of premium specialty papers for the tobacco industry. It also manufactures specialty papers for other applications. Schweitzer-Mauduit and its subsidiaries conduct business in over 90 countries and employ 2,800 people worldwide, with operations in the United States, France, Brazil, the Philippines, Indonesia, Canada and a joint venture in China. For further information, please visit the company’s Web site at http://www.schweitzer-mauduit.com.

    Scott Humphrey
    Pete Thompson
    both of Schweitzer-Mauduit International, Inc.
    Web Site: http://www.schweitzer-mauduit.com

SOURCE Schweitzer-Mauduit International, Inc.

Source: newswire

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