Fraser Papers Announces Temporary Shutdown of Two Paper Machines

Fraser Papers Inc. ("Fraser Papers" or the "Company") (TSX: FPS) announced today it plans to curtail production of commodity freesheet paper grades on paper machines #13 and #14 at its paper mill in Gorham, New Hampshire for an indefinite period starting April 13, 2008. Production on paper machine #12 was suspended late in 2007. Fraser Papers expects to continue operating two of the five paper machines (paper machines #11 and #19) in Gorham that produce specialty printing papers (principally light-weight opaque papers) and industrial towel. The three machines to be curtailed represent annual production capacity of 109,000 tons.

"The impact of rising input costs, particularly oil and market pulp, has resulted in significant operating losses for certain of the grades produced at the Gorham mill," said Peter Gordon, President and CEO of Fraser Papers. "Increases in the selling price of commodity freesheet products have not been sufficient to offset these rising costs," noted Gordon.

The Company will fulfill all of its existing commitments to customers and expects to operate at current production levels until April 13, 2008, depending on demand. If cost pressures ease and the profitability for the grades produced on these machines improves before April 13, 2008, the Company may cancel or defer the curtailments.

The State of New Hampshire has been working with the Company on alternatives to address increasing costs at the mill. During this temporary shutdown, Fraser Papers will continue to work with the State to explore various initiatives to reduce the mill's reliance on oil as a fuel source.

As a result of the production curtailments, 167 affected employees at the Gorham operations will be laid off indefinitely. The Company has given employees 60-day notice under the Workers Adjustment and Retraining Notice ("WARN") Act. Under the provisions of the WARN Act, affected employees will be paid through the notice period, even if the production cuts are implemented earlier.

Fraser Papers is an integrated specialty paper company which produces a broad range of specialty packaging and printing papers. The Company has operations in New Brunswick, Maine, New Hampshire and Quebec. Fraser Papers is listed on the Toronto Stock Exchange under the symbol: FPS. For more information, visit the Fraser Papers web site at www.fraserpapers.com.

Note: This press release contains forward-looking information and forward-looking statements within the meaning of Canadian provincial securities laws. These forward-looking statements include, among others, statements with respect to production curtailments, continuing operation of paper machines, commitments to customers, production levels, oil reduction initiatives and employee lay-offs. The words "plan", "expect", "will", "may", and other expressions which may be predictions of or indicate future events and trends and which do not relate to historical matters identify forward-looking statements. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Factors that could cause actual results of the curtailments, continuing operation, customer commitments, production, initiatives and lay-offs to differ materially from those set forth in the forward-looking statements include the cost of oil and market pulp, unforeseen production issues, demand for the Company's products, accessibility of research resources, staffing requirements at the Company's operations and other risks detailed from time to time in the documents filed by the Company with the securities regulators in Canada. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.