Mercer, Resolute Forest Products launch JV company, Performance BioFilaments, to commercialize biomaterial derived from wood fiber called cellulose filaments, which has potential to make consumer and industrial products stronger, lighter, more flexible

NEW YORK , June 23, 2014 (press release) – 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.

About Performance Biofilaments Inc.

Performance BioFilaments Inc., a joint venture between Mercer International Inc. and Resolute Forest Products Inc., is focused on the development of commercial applications for cellulose filaments, one of the world's most exciting new biomaterials. Cellulose filaments can be used to enhance the performance characteristics of a wide variety of products. Derived from wood fiber – a renewable and natural resource – cellulose filaments optimize the strength, stability, flexibility and longevity of a variety of materials including composites, coatings and consumer products. For more information, please visit www.performancebiofilaments.com.

About Mercer International Inc.

Mercer International Inc. is the world's largest producer of Northern Bleached Softwood Kraft ("NBSK") market pulp and has become a leader among forest products companies in embracing the bio-economy and maximizing value derived from residual forest resources. Mercer has three modern, large-scale pulp mills located in Germany (Rosenthal and Stendal), as well as BC, Canada (Celgar). The Company's total NBSK pulp production capacity is 1.54 million tonnes per year.

The mills utilize all parts of the wood they process to create not only pulp, but also valuable by-products. These by-products often provide renewable alternatives to traditionally petrochemical-based materials. For example, Mercer's mills have a combined green energy generation capacity of 305 MW. All of the mills are net exporters of energy, meaning they produce more energy than they consume. Biochemicals have become an increasingly important by-product of Mercer's pulping process, as well.

The Company's shares are listed on the NASDAQ Global Market (MERC) and on the Toronto Stock Exchange (MRI.U). For more information, please visit www.mercerint.com.

About Resolute Forest Products Inc.

Resolute Forest Products Inc. is a global leader in the forest products industry with a diverse range of products, including newsprint, specialty papers, market pulp and wood products. Resolute owns or operates nearly 40 pulp and paper mills and wood products facilities in the United States, Canada and South Korea, and power generation assets in Canada. The shares of Resolute trade under the stock symbol RFP on both the New York Stock Exchange and the Toronto Stock Exchange. For more information, please visit www.resolutefp.com.

The preceding includes forward looking statements which involve known and unknown risks and uncertainties which may cause the Company's actual results in future periods to differ materially from forecasted results. Words such as "expects", "anticipates", "projects", "intends", "designed", "will", "believes", "estimates", "may", "could" and variations of such words and similar expressions are intended to identify such forward-looking statements. Among those factors which could cause actual results to differ materially are the following: the highly cyclical nature of the Company's business, raw material costs, the Company's level of indebtedness, competition, foreign exchange and interest rate fluctuations, the Company's use of derivatives, expenditures for capital projects, environmental regulation and compliance, disruptions to the Company's production, market conditions and other risk factors listed from time to time in the Company's SEC reports.

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