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Mercer International Inc. Announces Joint Venture With Resolute Forest Products Inc.; Plans To Commercialize Sustainable New Biomaterial

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Mercer International Inc. ("Mercer" or "the Company") today announced the launch of a new joint venture company called Performance BioFilaments Inc. ("Performance BioFilaments") established to commercialize an innovative biomaterial derived from wood fiber called cellulose filaments. The joint venture will be equally owned with Resolute Forest Products Inc. ("Resolute"), a leader in the forest products business.

Cellulose filaments are derived from wood pulp which has been processed using innovative technology licensed from FPInnovations Inc. ("FPInnovations"), one of the world's leading forest products research organizations. The cellulose filaments' exceptional strength and high aspect ratio make it a unique cellulose-based biomaterial. We believe it has the potential to make a wide array of consumer and industrial products stronger, lighter, more flexible and more durable, while leveraging a sustainable and renewable resource with a low carbon footprint.

"Commercializing cellulose filaments represents a compelling business opportunity developed through our focus on collaborative innovation and takes one of our initiatives to the next level," says Jimmy S.H. Lee, President and Chairman of Mercer. "We are excited to be working jointly with Resolute, which allows us to leverage our respective global research knowledge and resources to implement the commercialization process for this high potential material."

Performance BioFilaments will seek joint development partners from a range of industries – from automotive and manufacturing, to construction and high-end consumer products – to develop new commercial product applications for cellulose filaments. While we are optimistic about the potential for commercialization of this product, we recognize that, as with the development of all novel product applications, the process can be lengthy and without assurances.

Performance BioFilaments will build upon the significant investment made by FPInnovations in technology development and production through its current C$43.1 million cellulose filaments project. All of the know-how gained from their project, as well as commercial development quantities of cellulose filaments, will be available to Performance BioFilaments for its commercialization efforts.

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