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forest through sustained yield forestry. KPC, consistent with 

 the expectations of the long-term contract, has worked hard 

 over time to develop complete utilization and maximum value of 

 the timber resource being harvested in Southeast Alaska. 



CURRENT OPERATIONS 



We operate fully integrated forest products operations 

 starting with our timber harvest operations concentrated on the 

 northern half of Prince of Wales Island and the northwest 

 corner of Revilla Island. Working with the Metlakatla Indian 

 Community we operate sawmill facilities on Annette Island. 

 Attached as Exhibit E is a copy of Mayor Atkinson's letter of 

 August 22, 1988 explaining the importance of this operation to 

 the Metlakatla Indian Community. We have recently brought on 

 line a new $13 million small log sawmill at Ward Cove which 

 will produce 60 million board feet of planed dimension lumber 

 annually for export and domestic markets. Our new sawmill has 

 created 75 new jobs and is a major advancement in utilization 

 to develop maximum values and improved economics in the forest 

 harvest and conversion equation. This will result in higher 

 stumpage values and payments to the Federal treasury and local 

 government bodies. These operations are supported by and 

 operated in conjunction with our pulp mill at Ketchikan. 



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