Guilin Paper Inc. Intends to Acquire Feitao Paper Product Ltd

Business Wire,  Nov 26, 2007  

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NEW YORK -- Guilin Paper Inc. (OTCBB:GUPR) announced today that on November 23, 2007, GUPR entered into a non-binding letter of intent to acquire Feitao Paper Product Ltd. ("Feitao"). GUPR intends to acquire all of the outstanding capital stock of Feitao in a cash and stock transaction. The final terms of the transaction will be determined pending the outcome of the financial audit of Feitao.

Feitao, a manufacturer of packaging paper, also located in Guangxi province of China, has been a strategic partner of GUPR. The main focus of Feitao's production line includes Kraft linerboard, white top linerboard and high performance corrugating medium and coated duplex board. Feitao's technically advanced packaging paper production lines have an aggregated designed annual capacity of 13,000 tons. In 2006, the unaudited annual revenue and net profit for Feitao were approximately US$5 million and US$430,000 respectively.

Guilin Paper has enjoyed a steady partnership with Feitao Paper since 2003 through its wholly own subsidiaries, Guangxi Forestry Lipu Paper Company Limited and Guangxi Hengli Power Company Limited. GUPR sells raw materials and electrical power to Feitao and buys waste paper from Feitao. During the nine months ended September 30, 2007, sales of raw materials and power to Feitao totaled $1,496,822 and GUPR purchased waste paper from Feitao totaled approximately US$128,000. As of September 30, 2007, GUPR's accounts receivable included US$2,252,512 due from Feitao. The combination of GUPR and Feitao is expected to increase the production of packaging paper and reduce the production cost of such products for both companies.

Zhang Fangde, the Chief Executive Officer, stated, "We are delighted and looking forward to reaching a definitive agreement with Feitao Paper Product Ltd. The Chinese packaging paper market has experienced unprecedented growth in the past few years. According to data from the Chinese Association of paper manufacturers, the average Chinese annual growth rate of production and consumption of packaging paper since 1990, are 15.4% and 15.6%, respectively and we are excited to meet such growing demand with the higher production level achievable through this acquisition."

"GUPR aims to become the national leader in containerboard product manufacturer in capacity, profitability and efficiency. With Feitao Paper, we are able to combine both companies' comparable advantages, to increase our packaging paper product offering through more technologically advanced equipments and integrated production facilities, in order to meet the paper industry's rapid growth." Zhang Fangde continued, "We will definitely try to complete the acquisition with Feitao Paper and continue to pursue sustainable business growth going forward."

About Guilin Paper Inc.

Located on 50 acres of land in Lipu County, Guangxi Province, China, and with around 700 staff members, Guilin Paper, Inc. mainly engages in paper making, paper pulp production and power generation. GUPR uses a series of high-tech and high value-add processes to produce special packaging paper. It is committed to supplying the packing paper market while focusing on developing new products for its expanding customer base. Maintaining its comprehensive quality control is extremely important to GUPR along with introducing new products and developing new production techniques to expand their product catalog, improve quality and raise margins. GUPR has numerous paper products under the "LITA" brand which are amongst their customers' favorites in the domestic market. In addition they are the first paper making company in Guangxi to obtain the ISO 9001 certificate.

For more information regarding the Company, please visit our website: www.guilinpaperinc.com.

For investor relations information regarding Guilin Paper, Inc., please contact Eva Wang at 646-200-6318, email: eva@guilinpaperinc.com.

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