Almaty, Kazakhstan – August 9, 2007 – Kazakhstan Kagazy PLC (the “Company” or “Kagazy”), owner of one of Kazakhstan’s leading industrial groups, today announced that it has signed an agreement to acquire 100% of Kazupack LTD (“Kazupack”), the third largest producer of corrugated board in Kazakhstan, for a total cash consideration of US$ 5 million. In addition, Kazakhstan Kagazy PLC will assume US$ 3 million of Kazupack’s debt. The deal is expected to be completed by September 30, 2007, following Kazupack’s audit.

Founded in 1999, Kazupack operates in the high added-value segment of the corrugated board market, utilizing the die cutting process, which is widely used in the production of consumer goods packaging. Its corrugating plant, located on 1.5 hectares of land in Almaty, produces approximately 1.5 million square metres of corrugated board per month. Kazupack’s products are used by a number of international and regional brands, such as Pepsi-Cola, Efes and Derbes. Kazupack reported revenues of approximately KZT 180 million (US$ 1.45* million) for the first quarter ended March 31, 2007, according to unaudited financial results under Kazakh Accounting Standards.

Maksat Arip, Chief Executive Office of Kazakhstan Kagazy PLC, commented: “This acquisition is in line with our previously stated intention to consolidate our market leading position in the regional paper production business. We are very pleased to be able to integrate Kazupack into our Group and we see this transaction as an opportunity to enhance our client base. This is a strategic acquisition for our Company, which will strengthen our presence in the Central Asian market.”

* Based on a National Bank of the Republic of Kazakhstan average KZT/US$ exchange rate during the first quarter ended March 31 2007, (124.9 KZT/US$).

Conference call information

Kazakhstan Kagazy management will host a conference call today at 11 am (New York time) / 4 pm (London time) / 7 pm (Moscow Time)/ 9 pm (Almaty Time) to discuss the acquisition of Kazupaсk.

The dial-in numbers for the conference call are:
UK/International: + 44 20 7138 0837
US: + 1 718 354 1172

A replay will then be available for 7 days after the conference call. To access the replay, please dial:
UK/International: + 44 20 7806 1970
US: + 1 718 354 1112
PIN number: 5617640#

For further information, please visit http://www.kazakhstankagazy.com/ or contact:

Kazakhstan Kagazy PLC, which is incorporated in the Isle of Man, owns a major industrial group in Kazakhstan. The Company runs Central Asia’s largest producer of paper, corrugated board and packaging products through a subsidiary, which was established in 2001. Kagazy stands for “paper” in the Kazakh language. It also operates one of the leading commercial real estate development companies in the country through Prime Estate Activities Kazakhstan LLP (Peak), which owns approximately 538 hectares of prime land, strategically located in a newly created industrial zone near Almaty, for construction of commercial warehousing and logistics infrastructure facilities. The Group reported total assets of approximately KZT 41,838 million (US$ 337.8¹ million) as at March 31, 2007 and consolidated revenues of approximately KZT 1,687 million (US$ 13.5² million) for the first quarter ended 31 March 2007, according to unaudited IFRS financial results. Kazakhstan Kagazy’s securities are listed under the symbol “KAG” on the London Stock Exchange.

This announcement includes statements which are, or may be deemed to be, "forward-looking statements". All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's products and services) are forward-looking statements.

By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. These factors include but are not limited to those described in the formal prospectus to be issued in connection with the Offering.

Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement speak only as at the date of this announcement and are subject to risks relating to future events and other risks, uncertainties and assumptions in relation to the Company's operations, results of operations, growth strategy and liquidity. Subject to any legal or regulatory requirements, the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

¹ Based on a National Bank of the Republic of Kazakhstan KZT/US$ exchange rate as at March 31, 2007, (123.8 KZT/US$).

² Based on a National Bank of the Republic of Kazakhstan average KZT/US$ exchange rate during the first quarter ended March 31 2007, (124.9 KZT/US$).