Swedish Match announces Snus capacity investment of approximately 500 MSEK in Sweden

9/19/2000 1:03 PM EST

Swedish Match announces Snus capacity investment of approximately 500 MSEK in
Sweden

Swedish Match has decided to build a new factory for the production of snus
(Swedish moist snuff) in the Gothenburg area on the Swedish West coast.

The total investment for land, building, machinery and related costs is
estimated to approximately 500 MSEK over three years.

Over the past 20 years smoking has declined and the use of snus has increased
in Sweden. The growth level over the past 5 years has been approximately 5 per
cent annually. More than half of the approximately 900000 Swedes who are
regular consumers of snus formerly smoked cigarettes. Sweden is the first
country in the world to reach the WHO target of less than 20 per cent of the
adult population being cigarette smokers.

The trend from cigarette smoking to snus use has been strengthened in recent
years. To be able to meet the demand Swedish Match needs to increase its
production capacity. At the existing snus factory in Gothenburg there is not
enough land to enlarge capacity to the extent needed.

Currently Swedish Match is investigating different location alternatives in
the Gothenburg region. The new plant is expected to operate at full capacity
from 2003 and employ approximately 120 people. The existing factory, which
will continue its operations in parallel with the new plant, currently employs
approximately 315 people.

"With the new factory Swedish Match invests in state of the art production
technology, improves efficiency and increase capacity for portion packed snus,
the category of snus with the best volume growth", says Lennart Sundén,
President and CEO of Swedish Match. "We are building for the future and for a
continued strong development for our snus business".

Swedish Match is an international group with its head office in Stockholm. The
company manufactures a broad range of products within the OTP (Other Tobacco
Products) category, with smokeless tobacco as its core business along with
cigars and pipe tobacco, as well as matches and lighters. The products are
sold in approximately 140 countries. Sales for the twelve months period ending
June 30, 2000 amounted to approximately 10,200 MSEK. Swedish Match is listed
on OM Stockholm Stock Exchange (SWMA) and on NASDAQ (SWMAY).

For further information, please contact:
Lennart Sundén, President and CEO +46 8 658 01 75 (office)
Sven Hindrikes, Executive Vice President and CFO +46 8 658 02 82 (office)
Bo Aulin, Senior Vice President, +46 8 658 03 64 (office)
Secretary and General Counsel
Emmett Harrison, Vice President, Investor Relations +46 8 658 01 73
(office)
+46 709 38 01 73 (mobile)