HADERA, Israel, Dec. 28 /PRNewswire-FirstCall/ -- As previously announced on December 12, 2005, American Israeli Paper Mills Ltd. (ASE:AIP) (the "Company" or "AIPM") declared a cash dividend in the amount of NIS 12.494 per share payable on January 10, 2006 to shareholders of record on December 28, 2005. The exact dollar payout was to be based on the rate of exchange of the NIS in relation to the U.S. Dollar in effect on December 28, 2005, the record date, and has now been determined to be $2.7214 per share before tax. The Income Tax law of the State of Israel requires the withholding of 20 percent from the dividend payment. The Company also clarified today, following publications in the Israeli press, that it is currently reviewing different plans to expand its activities in the next decade in order to increase its income and improve its profitability. As reported in the past, the Company is currently examining and promoting the establishment of a natural gas power plant in its site in Hadera. The capacity of the plant has not yet been determined and to date not all of the required approvals have been obtained. In addition, the Company is in the initial stages of examining the possibility of expanding its production of packaging paper in its site in Hadera. This plan has not yet reached the stage of a detailed business plan and to date has not been approved by the Board of Directors. Concurrently, Hogla-Kimberly Ltd., an associated Company (49.9%), is examining ways to expand its activity in Turkey through its subsidiary in Turkey by introducing its international brands. The launch of Kotex(R) feminine hygiene products is currently taking place in Turkey, and the introduction of further brands and additional investments will be examined later on. The current investment is not substantial to the Company. To date, the additional future expansion plans of Hogla-Kimberly have not been completely formed and have not received the necessary internal approvals. The implementation of the foregoing plans, if approved, and the anticipated continued stability in Turkey could increase the turnover of the Turkish company in the next five years from approximately $40 million today to approximately $150 million. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements predicting AIPM's future growth. These forward-looking statements are inherently difficult to predict and involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, projections of future performance including predictions of future profitability and expectations of the business environment in which AIPM operates. For a detailed discussion of these and other risk factors, please refer to AIPM's filings with the Securities and Exchange Commission, including Form 20-F and Reports on Form 8-K. DATASOURCE: American Israeli Paper Mills Ltd. CONTACT: Philip Y. Sardoff, +1-908-686-7500, for American Israeli Paper Mills Ltd.

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