M-real - Company Announcement

M-real plans new internal profit improvement measures

M-real Corporation Stock Exchange Release on 16 December 2009 at 15.25

M-real plans new internal profit improvement measures

M-real Corporation, part of Metsäliitto Group, is planning new internal profit
improvement measures of which the main ones are the following:

-          Plan to permanently shut down the Alizay pulp mill
-          EUR 22 million investment at Husum mill to improve its energy
efficiency
-          New EUR 20 million internal profit improvement programme covering all
M-real's  business areas

Additionally, M-real announced on 9 December 2009 a release regarding planned
measures in M-real Zanders speciality paper mills in Germany.

“These measures would form a major step in the re-engineering of our paper
businesses addressing the most significant internal efficiency problem areas we
have. Our profitability would clearly improve after the contemplated
implementation of these measures. In addition to our internal improvements, the
strategic review of our paper business continues with an aim to further support
our profitability as well as to improve the business environment of European
paper industry,” says Mikko Helander, CEO of M-real.

Alizay's integrated site includes a pulp mill, an uncoated fine paper machine
and three paper converting lines. Alizay's pulp mill has for a long time been
unprofitable and the pulp quality is not fully in line with market requirements.
Additionally, major investments would be needed during the coming years to
fulfil environmental requirements. The pulp mill has been temporarily shut down
since March 2009. The production of recycled fibre based office papers has
increased since late 2008 and it currently corresponds to approximately half of
the total paper production in Alizay. The need for chemical pulp in the paper
production has thus clearly decreased. In the future M-real aims at increasing
the volumes of recycled fibre based products in Alizay.

Negotiations with employees on the possible closure of Alizay's pulp mill will
commence without delay. Pulp mill will continue to be shut down during the
negotiation process. Due to the possible pulp mill closure Office Papers
4Q 2009 result will include EUR 31 million write offs as a non-recurring item.
Related possible non-recurring cash costs will be determined once the
negotiations are completed, by the end of July 2010 at the latest.

Husum energy efficiency investment, including a new turbine, is expected to
total EUR 22 million. The planned measures are expected to improve the
electricity self-sufficiency of the Husum site from 30 per cent to 50 per cent.
The investment is expected to be completed by the end of 2010.

Additionally, a new M-real level EUR 20 million internal profit improvement
programme is being launched for 2010. The measures based on continuous
improvement principle are evenly split between the business areas and include
both variable and fixed cost savings.

The planned measures, together with the earlier announced plans for machine
closures and cost savings in M-real Zanders, are expected to improve M-real's
annual operating result by EUR 80 million with full effect from 2011 onwards.
The result improvement of the new planned measures in 2010 numbers is expected
to be EUR 40 million. The result in 2010 is expected to improve in total by
approximately EUR 100 million including the impacts of the new planned measures
as well as the previous years' profit improvement programmes.

M-real will arrange a conference call for analysts today at 16.30 Finnish time.
Participating in the call will be CEO Mikko Helander and CFO Matti Mörsky. From
Europe please dial +44 (0)20 7162 0125 (from US +1 334 323 6203). The live
webcast can be accessed at http://qsb.webcast.fi/mreal/

For further information, please contact:

Matti Mörsky, CFO, tel. +358 10 465 4913
Juha Laine, Vice President, Investor Relations and Communications, tel. +358
10 465 4335


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