Chinese Dissolving Wood Pulp Tariff Impact Statement

On April 4, 2014, a Final Determination was announced by China's Ministry of Commerce ("MOFCOM") concerning its anti-dumping investigation of imported cellulose pulp originating from Canada, the United States and Brazil. The final duty imposed by MOFCOM on dissolving pulp imports within the scope of investigation for Cosmo Specialty Fibers was set at 16.9%. While Cosmo is disappointed with the rationale and results of the Final Determination, it was not unexpected. The Company had already initiated a mitigation plan including cost reductions, sales into alternative markets, moving into additional specialty pulp markets, and completing acetate qualification – a product predominantly sold outside the Chinese market, and exempted from duty within the Chinese market. As the tariff mitigation plan completes during 2014, Cosmo fully expects to regain typical sales volumes.