American Israeli Paper Mills Ltd. decrease of deferred tax asset of KCTR in Turkey

Oct 10, 2007. /Lesprom Network/. American Israeli Paper Mills Ltd. announced that Hogla-Kimberly Ltd. (an associated company - 49.9%) reported that during the third quarter of this year there was an increase in the competition in the Turkish diapers market, in which Hogla-Kimberly Ltd. operates through the Turkish company KCTR. The increased competition is evidenced by further erosion of the market selling prices by the main competitors, combined with attempts of additional competitors to penetrate the market. Therefore, KCTR had decided to decrease the deferred tax asset in its financial reports, created due to past losses. Nevertheless, KCTR continues to implement its long-term business plan to expand its activities in Turkey and is successfully strengthening the position of its brands Huggies® and Kotex® in the market. As a result of the distribution agreement, which was signed with Unilever in the first quarter of this year, KCTR is succeeding to increase significantly its turnover in the third quarter while improving its gross margins. The company estimates that the influence of the decrease in the deferred tax asset in Turkey on the company's results in the third quarter will amount to approximately NIS 7 million ($1.7 million) and will decrease the expected improvement in the company's profits in the third quarter, resulting from the increase in the company's turnover in Israel. The American Israeli Paper Mills Group Ltd. (AIPM) is the leading Israeli manufacturer and marketer of paper and paper products.