Mr. Terry Hodgins reports

CANFOR PULP PRODUCTS INC. ANNOUNCES FOURTH QUARTER 2011 RESULTS AND QUARTERLY DIVIDEND

Canfor Pulp Products Inc. has issued its fourth quarter and full year 2011 results as well as the results of Canfor Pulp Limited Partnership in which CPPI has a 49.8-per-cent share.

For the quarter, CPPI reported net income of $5.9-million or 17 cents per share, representing CPPI's share of the partnership's income less an income tax provision of $1.9-million.

For the quarter, the partnership reported sales of $212.7-million and net income of $15.8-million or 22 cents per unit. The partnership generated EBITDA of $37.8-million. Results for the quarter were impacted by lower market pulp prices and the extended outage at the Northwood pulp mill. Capital expenditures of $28.8-million or 40 cents per unit incurred in the quarter reduced distributable cash to negative $3-million or negative four cents per unit.

For the year, the partnership reported sales of $941.0 million and generated net income of $138.6-million, EBITDA of $218.2-million and distributable cash of $131.6-million, or $1.85 per unit. CPPI reported net income of $72.6-million or $2.05 per share and declared dividends of $1.45 per share for 2011, including the dividend relating to the fourth quarter of 25 cents per share declared in February, 2012.

Capital expenditures for the year were $139-million, of which $56-million was funded by the partnership, and the remainder from government programs. The largest government funding source was the Canadian Pulp and Paper Green Transformation program. The partnership was allocated a total of $122.2-million and received approval to proceed with four projects under the program. Three projects were completed in 2011, including the Northwood recovery boiler upgrade. The final project, which was partially funded by the program, is to upgrade the feedwater system at the Prince George pulp and paper mill and is projected to be completed in the third quarter of 2012.

Global softwood pulp markets softened through the fourth quarter as world pulp producer inventories increased to 36 days of supply. NBSK pulp list prices decreased $80 (U.S.) per tonne for North America to $890 (U.S.) and $125 (U.S.) per tonne for Europe to $825 (U.S.). The partnership's NBSK pulp list price for China decreased $150 (U.S.) per tonne to $690 (U.S.).

The global softwood pulp market is projected to remain soft through the first quarter of 2012. There is ample supply as historically there is minimal scheduled maintenance downtime at pulp mills during the winter months. However, current pricing at or below cash costs of some NBSK producers may reduce the risk of further price erosion. There are no maintenance outages scheduled at the partnership's operations in the first quarter of 2012.

CPPI announced a quarterly dividend of 25 cents per share to be paid on Feb. 23, 2012, to shareholders of record at the close of business on Feb. 16, 2012.

Additional information

A conference call to discuss the fourth quarter 2011 financial and operating results will be held on Tuesday, Feb. 7, 2012, at 8 a.m. Pacific Time.

To participate in the call, please dial 416-340-8018 or toll-free at 1-877-223-7781. For instant replay access, please dial 905-694-9451 or toll-free at 1-800-408-3053 and enter participant passcode No. 2774354. The conference call will be webcast live and will be available on the company's website.

                                                             
              CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
           (thousands of dollars, except unit and per unit amounts)
                                                                          
                                  Three months ended                Year ended
                                Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,
                                   2011         2010         2011         2010
Income
Equity income in Canfor                                                     
Pulp Limited Partnership    $     7,861  $    23,639  $    69,039  $    89,166
Interest income                      79            -          243            -
Total income                      7,940       23,639       69,282       89,166
Costs and expenses
Administrative expenses              73            -        1,184            -
Increase (decrease) in                                                      
amortized cost of fund                                                     
units                                 -       (1,775)           -      199,119
Financing                                                                   
expense/distributions                                                      
declared                              -       37,268            -       91,573
                                     73       35,493        1,184      290,692
Net income (loss) before
income taxes                      7,867      (11,854)      68,098     (201,526)
Income tax expense                                                          
(recovery)                        1,944         (520)      (4,503)      (2,783)
Net income (loss)           $     5,923  $   (11,334) $    72,601  $  (198,743)
Equity interest in other                                                    
comprehensive income                                                       
(loss) of Canfor Pulp                                                      
Limited Partnership              (2,478)       2,829       (8,850)      (6,761)
Income tax recovery of                                                      
other comprehensive                                                        
loss of Canfor Pulp                                                        
Limited Partnership                 596            -        2,186            - 
Comprehensive income                                                        
(loss)                      $     4,041  $    (8,505) $    65,937  $  (205,504)
Net income (loss) per                                                       
share/unit, basic and                                                      
diluted                     $      0.17  $     (0.32) $      2.05  $     (5.60)

We seek Safe Harbor.