HADERA, Israel, July 3 /PRNewswire-FirstCall/ -- American Israeli Paper Mills Ltd. (ASE:AIP) (the "Company" or "AIPM") announced today that Kimberly- Clark Turkey ("KCTR"), a subsidiary of Hogla-Kimberly Ltd. (associated company) in Turkey, has reported that the Turkish Government recently reduced the corporate tax rate in Turkey from 30% to 20% and has also eliminated the withholding tax requirement on dividends paid to foreign investors. In the long term, the decrease of tax rates in Turkey may have a positive effect on the financial results. Nevertheless, since KCTR recorded a tax asset on account of carryover losses created as part of its corporate reorganization in Turkey, the decrease of tax rates in Turkey will adversely affect its results of operations in the second quarter of this year. In addition, KCTR operations have been affected by the sharp depreciation of the Turkish lira, that amounted to 19% in the second quarter. Due to the reduction in the exposure to the US dollar by KCTR during the last year, the impact of such depreciation has been minimized. KCTR is currently continuing to launch the international brands Huggies(R) and Kotex(R) in the Turkish market and its expansion of its business operations. As reported in the past, in light of the growth potential in the Turkish market, Hogla-Kimberly is analyzing plans for additional investments in the expansion of its operations in Turkey. These plans have yet to be fully formulated and approved by the Company's organs. The Company estimates that the above-related events at KCTR will result in a reduction in the Company's net income for the second quarter of this year of approximately NIS 8.5 million. DATASOURCE: American Israeli Paper Mills Ltd CONTACT: Philip Y. Sardoff for American Israeli Paper Mills Ltd, +1-908-686-7500

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