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-----BEGIN PRIVACY-ENHANCED MESSAGE-----Proc-Type: 2001,MIC-CLEAROriginator-Name: [email protected]: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQABMIC-Info: RSA-MD5,RSA, KFBXBsjoqtOhnXrK81gQ1nJAWQ+FaQx0vO8Mo4uIYJvjf6TVf5NCRG4aHQcbyybl rmFb9/nLCaKntMYbKyEY5g==

0000945234-08-000047.txt : 200802150000945234-08-000047.hdr.sgml : 2008021520080214175806ACCESSION NUMBER:0000945234-08-000047CONFORMED SUBMISSION TYPE:8-KPUBLIC DOCUMENT COUNT:19CONFORMED PERIOD OF REPORT:20080208ITEM INFORMATION:Regulation FD DisclosureITEM INFORMATION:Financial Statements and ExhibitsFILED AS OF DATE:20080215DATE AS OF CHANGE:20080214

FILER:

COMPANY DATA:COMPANY CONFORMED NAME:MERCER INTERNATIONAL INC.CENTRAL INDEX KEY:0001333274STANDARD INDUSTRIAL CLASSIFICATION:PULP MILLS [2611]IRS NUMBER:470956945STATE OF INCORPORATION:WAFISCAL YEAR END:1231

FILING VALUES:FORM TYPE:8-KSEC ACT:1934 ActSEC FILE NUMBER:000-51826FILM NUMBER:08619839

BUSINESS ADDRESS:STREET 1:14900 INTERURBAN AVENUE SOUTHSTREET 2:SUITE 282CITY:SEATTLESTATE:WAZIP:98168BUSINESS PHONE:(206) 674-4639

MAIL ADDRESS:STREET 1:14900 INTERURBAN AVENUE SOUTHSTREET 2:SUITE 282CITY:SEATTLESTATE:WAZIP:98168

FORMER COMPANY:FORMER CONFORMED NAME:MERCER INTERNATIONAL REGCO INC.DATE OF NAME CHANGE:20050715

8-K1o39326e8vk.htmFORM 8-K

Current Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February8, 2008

MERCER INTERNATIONAL INC.

(Exact name of Registrant as specified in its charter)

Washington
(State or other jurisdiction of incorporation or organization)

000-51826
(Commission File Number)

47-0956945
(I.R.S. Employer Identification No.)

Suite2840, 650 West Georgia Street, Vancouver, British Columbia, Canada V6B 4N8
(Address of Office)

(604)684-1099
(Registrants telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy thefiling obligation of the registrant under any of the following provisions (see General InstructionA.2. below):

o Written communications pursuant to Rule425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01REGULATION FD DISCLOSURE

The information contained in this Current Report shall not be deemed to be filed for the purposesof Section18 of the Securities Exchange Act of 1934 (the Exchange Act) or otherwise subject tothe liabilities of that section, nor shall it be incorporated by reference into a filing under theSecurities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specificreference in such a filing.

Attached as Exhibit99.1 are materials relating to Mercer International Inc.

ITEM 9.01FINANCIAL STATEMENTS AND EXHIBITS

Exhibit No. Description

99.1

Presentation Materials relating to Mercer International Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly causedthis report to be signed on its behalf by the undersigned hereunto duly authorized.

MERCER INTERNATIONAL INC.

/s/David M. Gandossi

David M. Gandossi

Chief Financial Officer

Date:February8, 2008

MERCER INTERNATIONAL INC.

FORM 8-K

EXHIBIT INDEX

Exhibit Number Description

99.1

Presentation Materials relating to Mercer International Inc.

EX-99.12o39326exv99w1.htmEXHIBIT 99.1

Presentation Material relating to Mercer

Exhibit99.1

Strategies for Pulp & Paper Conference

Miami, Florida

February 2008

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" forforward-looking statements. Certain information included in this presentationcontains statements that are forward-looking, such as statements relating toresults of operations and financial conditions and business developmentactivities, as well as capital spending and financing sources. Such forward-looking information involves important risks and uncertainties that couldsignificantly affect anticipated results in the future and, accordingly, such resultsmay differ materially from those expressed in any forward-looking statementsmade by or on behalf of Mercer. For more information regarding these risks anduncertainties, review Mercer's filings with the Securities and ExchangeCommission.

Forward Looking Statements

Company Overview

Mercer is the largest publicly traded NBSK(1) market pulp producer in theworld

Operates three pulp mills with 1.43 million ADMT(2) of capacity

_________

(1) NBSK = northern bleached softwood kraft.

(2) ADMT = air dried metric tonnes.

(3) Stendal is a 70% owned facility

Rosenthal

(Germany)

Stendal (3)

(Germany)

Celgar

(BC, Canada)

480,000 ADMT

325,000 ADMT

620,000 ADMT

Mercer in Brief - Consolidated Financials I n M illions of EUR(unless otherwise stated) LTM EndedSept.30, 2007 For YearEnded 2006 For YearEnded 2005 Pulp Production 1,363,443 Admt 1,302,260 Admt 1,184,619 Admt Net Sales 697.7 624.0 452.4 Operating EBITDA 139.3 148.3 69.8 I n M illions of EUR(unless otherwise stated) Sept. 30, 2007 December 31, 2006 December 31, 2005 Cash 69.4 69.4 82.8 Total Assets 1,287.8 1,302.5 1,393.8 Total Employees 1,490 1,458 1,663

World Class Assets

Mercer versus other top 20 NBSK producers as of Q4 2007 (includes integrated capacity)

Large, modern facilities - low capital requirements, high runability

State-of-the-art environmental compliance

Energy - net producers

Note: Bubble sizes represent market and integratedpulp productions. Source: Jaakko Poyry X axis Company Comment Botnia Size 1 Stora Enso Size 2 Sodra Size 3 Mercer Size 4 Canfor Size 5 Ilim Pulp Size 6 Domtar Size 7 UPM Size 8 Billerud Size 9 Pope & Talbot Size 10 West Fraser Size 11 Terrace Bay Size 12 SCA Size 13 Catalyst Size 14 Heinzel Size 15 SFK Pulp Size 16 Weyerhaeuser Size 17 Potlatch Size 18 Boise Size 19 Mondi Size 20 Dots for lines W.Avg Cap

30 Horisontal line 347 0 0 Horisontal line 347 0 19.4 Vertical Line 800 0 19.44990855 Vertical Line 0 0 Units 12.39170984 Botnia 498.8860104 1930 20.40264293 Stora Enso 292.7001079 1854 17.07375887 Sodra 400.4609929 1410 9.223021583 Mercer 491.5827338 1390 24.85159817 Canfor 426.6894977 1095 25.27459459 Ilim Pulp 490.8378378 925 23.32071006 Domtar 244.2899408 845 12.84285714 UPM 420.2380952 840 20.1372093 Billerud 241.5891473 645 27.2480315 Pope & Talbot 297.0472441 635 21.44230769 West Fraser 291.1538462 520 26.4 Terrace Bay 386 386 11.1 SCA 420 420 25.37594937 Catalyst 366.1392405 395 11.7 Heinzel 375 375 27.4 SFK Pulp 375 375 19.1 Weyerhaeuser 375 375 24.5 Potlatch 365 365 27.92622951 Boise 157.4590164 305 20.60163934 Mondi 157.4590164 305

Weighted average PM capacity, 1 000 mt/a

WEAK

STRONG

4Q07

Botnia

Stora Enso

Ilim

Sodra

UPM

Mercer

Canfor

Billerud

P&T

Potlatch

Boise

West Fraser

Catalyst

Domtar

Heinzel

Terrace Bay

SCA

SFK

Weyerhaeuser

Mondi

Weighted Average

Capacity 380,000 t/a

Weighted Average

Technical Age 19 years

Technical Age, Years

Mill Capacity, 1,000 mt/a

"EU & US energy strategies are the same in that they both are focused onachieving a secure, affordable and environmentally friendly supply"

"Although each have a different approach to implement these strategies, thepotential world wide impact on agricultural crops and forest biomass issimilarly dramatic"

Drivers of these strategies include high oil prices, conflicts with fossil fuel exportingcountries and the fight against Global Warming

Biomass energy has a unique fit regarding these drivers:

Biomass is accepted as neutral with respect to carbon dioxide emissions

Biomass is usually not suitable for transport over long distances so it is grownwithin the region that it is utilized, therefore the supply is secure and reliable

Biomass is believed to be abundant and cheap

Presently bio-fuels such as Ethanol are produced mainly from agricultural crops andhave significantly impacted markets such as corn. In the future cellulose ethanol willplace similar global demands on wood markets.

Biomass to Energy - a Global Driver

Bio-energy in Europe

The target for the 10 EU countries who have the biggest gap to close forproduction of renewable energy equates to 113 million tonnes of oilequivalent or 832 million barrels of oil equivalent (boe) per year

EU member states have agreed to a binding target to increase the amount ofrenewable energy to 20% of the total EU energy output by 2020

In 2005 renewable sources accounted for 6% of total EU energy output

Biomass is expected to account for 40% of target

Bio-energy in Europe

Source: Dr. Udo Mantau: Woody Biomass Reserve

Objectives versus Reality

There is a mismatch between European objectives and actual biomass supply:

The estimated biomass forest reserves that could be made available forbio-energy have been significantly overestimated

Basis of overestimate includes counting fiber such as bark, actual fellings,and harvesting losses; unregistered felling numbers are not included

On a global basis, if we consumed all biomass presently being utilized forother purposes, we would only displace a small percentage of global fossilfuel consumption

Jurisdictions such as Europe have been the first tocompensate in recognition of the energy efficiencyrealized by Cogeneration

Cogeneration:

Provides the most efficient useof the biomass resource byincreasing thermal efficiencyfrom 40% to 85%

Reduces GHG emissions by upto 50%

Decreases requirement fortransmission system investment

Reduces transmission anddistribution losses

Black liquor wood chip usage

Wood Chip Product:

Results of burning blackliquor in pulp mill

Kraft pulp mills have the ability to extract the highest value from a woodresource, producing pulp and generating high quality green energy

Black liquor product:

** For discussion purposes only and is meant to approximate energy allocation in a pulp mill

Biomass electricity projects could be a major benefit to Northern HemispherePulp mills if there is a level playing field with other players for green electricitypricing. Pulp mills are the natural location for expanded biomass electricityproduction.

Environmental footprint already exists with potential to actually reduce the footprint

Pulp mills use more of the heat energy produced by biomass through cogeneration

Much of the existing infrastructure, systems and personnel are already in place

Although there is an opportunity for increased energy revenues, there is a largethreat that cellulose pulp producers will not be compensated for higher woodcosts caused by the paradigm shift of wood being valued on an energy basis

Threat of bio-energy to the Forest Products industry

The transition to bio-energy economics ishappening with Europe at the forefront, and otherfirst world jurisdictions following suit

Historically, wood has been priced in the marketbased on its value for alternative uses, such thatsaw logs were more valuable than pulpwood

Wood's energy value has not, until recently, hadan effect on market pricing of wood

We see a correlation forming between woodvalues and energy. It can be observed mostsignificantly in the correlation of industrialwood prices to pellet prices in Europe

With oil at $92 per barrel and 1 odmt of pelletsequating to 3.36 barrels of oil, pellets have a valueof 212 EUR / odmt, which is close to current pelletprices, correlating on a regional basis

Electric utilities realize additional value by usingwood, as they can reduce their spending oncarbon credits

Pulp Transition to Bio-energy Economics

At $92/ barrel of oil, wood should bevalued at approximately 212 EUR /odmt, which means various forestproducts should reflect these values inaddition to the value created in theproduct itself

Softwood kraft, with a wood to pulpyield of 45%, has an energy value of$675 per tonne

Hardwood kraft, with a wood to pulpyield of 50%, has an energy value of$614 per tonne

Softwood lumber has an energy valueof $193 per thousand board feet

Are we receiving value?

ARE OUR CUSTOMERS GIVING US VALUE FOR CONVERTING WOODINTO SOMETHING OTHER THAN ENERGY?

* FX rate of 1.45; assumed 0.628 odmt of wood per 1000bf lumber

Are we receiving value?

** FX rate of 1.45; assumed 0.628 odmt of wood per 1000bf lumber

Clearly, if we deduct the costs of non-fiber conversion,transportation and overhead off of the above margin, our industrydoes not receive any value for transforming wood into somethingbeyond its energy value

World Wood Supply Transition to

Bio-energy Economics

Wood based products have to start reflecting the energy value in wood

The use of historic pulp prices does not reflect future pricing mechanismsfor pulp. Prices for wood commodity products such as pulp will have ahigher floor price going forward.

"If higher prices for commodities such as pulp and lumber are notrealized, considering returns on capital investment, investment willonly flow to new biomass energy projects in the future. Thisredirection in investment will occur until pulp and lumber pricesreflect an adequate premium above their energy value."

Impact on dissolving pulp grades

The value of energy is not just going toimpact kraft pulp, but will also impact thedissolving grades through the revaluationof cotton and synthetic oil derived fibers

The same type of economic effects that willcause wood to be re-valued will impactcotton

Higher cotton fiber prices will result fromcompeting land uses for energy crops, aswell as higher costs for production in theform energy, water and fertilizer

With the textiles fiber market at 68 milliontonnes per year, any supply and demandimplications caused by energy will causeincreased demand and competiveness fordissolving pulp grades

Looking further into the future, we canexpect cellulose to replace certain oilbased compounds in products such asplastics, further tightening demand onwood supply

Conclusions:

Unless there is a change in how customers value forest or wood based products,the industry will not continue in its current state creating capacity decline whichwill continue to affect supply and demand fundamentals until prices rise highenough to reflect the energy value of wood

Over time, a levelling of the playing field on wood cost will occur betweenNorthern and Southern mills as other wood buyers such as energy converters willcompete in all regions on price valuing wood in simplest form as energy. Clearlywood on a global basis will reflect and possibly exceed its fossil fuel energyreflecting the carbon neutrality of wood

Transition to Bio-energy Economics

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