Mercer International Inc. Announces Proposed Expansion and Optimization of Friesau Facility

Mercer International Inc. (Nasdaq: MERC, TSX: MERC.U) (the “Company”) today announced that it has determined to proceed with a Phase II expansion and optimization project at its Friesau sawmill (the “Friesau Facility”). The project is designed to, among other things:
* increase annual lumber production capacity at the Friesau Facility by approximately 200 million board feet to an aggregate of approximately 750 million board feet on a continuous operating basis, through the addition of two new sorting lines and the completion of expansions to existing sorting lines;
* improve production grade capabilities by modifying primary breakdown lines to allow for expanded sorting capabilities, including the processing of shorter and more variable log grades; and
* improve efficiencies at the Friesau Facility, including by increasing production speeds and lowering personnel costs.

The Company currently estimates that capital expenditures will total approximately €37.5 million (approximately US$41.6 million) and that the project will be completed in or about the second quarter of 2020. The project is in addition to the Company’s previously announced Phase I project at the Friesau Facility, involving the installation of a new planer line.

David M. Gandossi, President and Chief Executive Officer of the Company, stated: “We are pleased to announce this Phase II expansion and optimization at our Friesau Facility, which we believe furthers our strategic expansion into lumber production. Based on the estimated cost and timing of the project, we believe this is a high-return project and an excellent opportunity to enhance shareholder value. The expansion of annual production capacity by 200 million board feet is roughly equivalent to the size of a new sawmill in the U.S. South. We look forward to working with our team at the Friesau Facility to implement this project.”

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