Fourth Quarter Capital Spending for the Forest Products Industry expected to be Flat

---

Researched by Industrialinfo.com (Industrial Information Resources, Inc; Houston, Texas) The forest products industry expects capital spending for the fourth quarter of 2001 to be flat. Staggered by a slowing economy and over capacity, projections of U.S. capital spending estimates for the last quarter of the year will be just over $1.1 billion compared to $1.2 billion for the same period last year. Pulp and paper companies are focused on reducing debt and producing better returns for shareholders.

By industry sector, spending for paper and paperboard mills will be approximately $800 million. Investments in wood products manufacturing plants represent an estimated $200 million and approximately $110 million for plants that convert paper and paperboard.

Cost reduction projects underline most of the spending activity followed by projects to enhance product quality. The April 2001 deadline established by the Environmental Protection Agency for Cluster Rule compliance has passed and will result in reduced environmental expenditures for the remainder of the year.

Randy Godet, Pulp and Paper Group Manager with Industrialinfo.com states that Typically, the end of the calendar year is when spending slows and company's prepare their capital spending plans and budgets for the following year. This year, manufacturer's will increase maintenance activities in mills that are already taking downtime for production curtailments.