141 



which are part of our contract . We know how to manage a forest 

 products operation ... to log, and operate sawmills and a 

 pulp mill . . . all on the basis of generating the highest 

 economic return and value to the tree. We know how to 

 accomplish these tasks within the framework of our long-term 

 contractual relationship with the federal government. We have 

 operated on the contract . . . through thick and thin . . . for 

 35 years. Our achievements are the result of the efforts of 

 our dedicated employees, many of whom have worked at KPC for 

 extensive periods of time. 



MARKETS 



We have seen dramatic recovery since 1986 in markets for 

 both pulp and lumber. Attached as Exhibit B is a summary of 

 KPC total net sales by country for the years 1986, 1987 and 

 1988. Environmentalist claims that our markets are being 

 eliminated and that our products all go to Japan are simply 

 untrue. While Japan is, and always will be, a very important 

 customer, we do business in broad domestic and world markets. 

 KPC exports of $134 million in 1988 clearly make a substantial 

 contribution toward a favorable balance of trade for our Nation, 



In August 1987, the world market price of dissolving pulp 

 passed the previous all-time high set in 1980. Market 

 improvements have progressed steadily quarter-to-quarter since 

 1986 and improvement is continuing into 1989. Attached as 

 Exhibit C is a summary of KPC net pulp sales by country for 



-7- 



