The Paper Products Ltd (HUHTAMAKI-PPL)
H1 Performance
Net Sales Up by 7%

Mumbai, July 29, 2005: The Paper Products Limited (PPL), (now "branded" as HUHTAMAKI-PPL), India's leading flexible packaging company, today announced its Unaudited Financial Results for the second quarter and the first half year ended June 30, 2005. The company achieved sales of Rs.214 crores during the half year representing a growth of 6.9%, over sales of Rs.200 crores in the corresponding first half of 2004.The profit before tax is Rs.17.16 crores as compared to Rs.19.89 crores in H1 last year. The basic and diluted earnings per share for the half year is Rs.10.03 as compared to Rs.11.08 in the corresponding period last year. On comparison between quarters, the company achieved sales of Rs.112.53 crores during the second quarter representing a growth of 9.2%, over sales of Rs.103.07 crores in the corresponding second quarter of 2004. The profit before tax is Rs.8.87 crores as compared to Rs.10.55 crores in Q2 last year. The basic and diluted earnings per share for the quarter is Rs.5.00 as compared to Rs.5.71 in the corresponding period last year. Continued focus on the company's innovation program NASP "New Applications Structures and Products & Processes" helped to achieve better sales amidst an adverse market situation caused by relentless increase in raw material prices due to the surge in prices of pertochemicals and other commodities; coupled with stiff resistance from customers to selling price increases.

In comparison with Q1 2005 results, while Net Sales for Q2 2005, were 11.3% higher, the Profit before tax of Rs.8.87 crores was higher than the Profit before tax of Rs.8.29 crores in Q1 2005, which includes Rs.1.8 crores compensation received on settlement of a claim. Excluding the claim settlement impact, Profit before tax was higher in Q2 by 36.7% as compared to Q1'05. However, margins continue to be under pressure. Specific strategies are being deployed to bring improvement.

Due to incessant heavy rains in Thane & Mumbai on 26th July 2005, the operations of Thane plant have been affected. Whilst the situation is being assessed, all steps are being taken to return to normalcy. The plants at Silvassa, Hyderabad and Nagpur are unaffected and fully operational.

About The Paper Products Limited (HUHTAMAKI-PPL):

PPL is India's leading manufacturer of primary consumer packaging with annual gross sales of over Rs.450 crores, and net capital employed of about Rs.200 crores.

Since 1999, PPL is a joint venture with the global packaging major - Huhtamaki Oyj, Finland who hold about 59% of the equity capital. Huhtamaki is the world's sixth largest consumer packaging multinational.

PPL is the pioneer and the technology and market leader in Flexible packaging and Labelling, with manufacturing facilities at Thane, Silvassa and Hyderabad. It meets the packaging needs of almost the entire range of FMCG segments including personal products, personal wash, laundry, foods, sauces, beverages, bakery products, spices, chocolates and confectionery, dairy, etc.; and also for seeds, specialized chemicals, electronics and many other specific specialized uses including anti-spurious packaging.

The Package Protection and Decoration products range includes latest leading edge technologies - Shrink sleeves, Wrap arounds, Heat transfers, Pressure sensitives and Metallised Paper labels.

Manufacturing of specialized cartons and cartoning systems, manufacture of poly films, specialized barrier metallising and high-end application extrusion coating are also part of PPL's product offerings. The company's packaging machines division offers complete packaging solutions to customers.

PPL mainly caters to the premium segment of packaging and its clients include Amway, Amul, Britannia, Cadbury, Castrol, Coca-cola, Dabur, DS Group, Emami, Eveready, GSK, Godrej, Hindustan Latex, HLL, HPCL, Marico, MICO, Nestle, Perfetti, P&G, TTK-LIG etc. etc.

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For more information contact:

Mr. Ravi Chidambaram
Controller - Finance
The Paper Products Limited
Tel: 2534 5021 (D)
Board: 2534 3691- Ext. 172
Mobile 98216 04825