Hemicellulose Separation Project

Hemicellulose is a cellulosic sugar, which when extracted and processed, has high value-added by-product potential such as for biofuel and biomaterial feedstock. Fortress Paper Ltd. has announced a strategic supplement to the already announced birch usage project at the Fortress Specialty Cellulose Mill aimed at extracting hemicellulose from underutilized species such as birch (the " Hemicellulose Project"). As part of the Hemicellulose Project, the Company plans to install a new accumulator at the Fortress Specialty Cellulose Mill which will allow for the collection of hydrolysate. By separating the hydrolysate from the liquor stream it can be further processed to produce a number of bio-products, including xylose and furfural. Currently, the hydrolysate is neutralized and mixed with weak black liquor, sent to the evaporators and then fired in the recovery boilers. If the hydrolysate is removed from the liquor cycle and processed separately it will offload the evaporators and recovery boilers. It is expected that by offloading the evaporators and recovery boilers the Fortress Specialty Cellulose Mill will able to utilize more of its incremental digester capacity. The Birch Project and Hemicellulose Project are expected to cost approximately $23.4 million in aggregate, of which $3.65 million is in respect of the Hemicellulose Project.