CORPORACIÓN DURANGO, S.A. DE C.V. Sep 27, 2005 The largest papermaker in México… INVESTOR PRESENTATION

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<ul><li> Slide 1 </li> <li> CORPORACIN DURANGO, S.A. DE C.V. Sep 27, 2005 The largest papermaker in Mxico INVESTOR PRESENTATION </li> <li> Slide 2 </li> <li> The Company CORPORACIN DURANGO THE COMPANY 1 </li> <li> Slide 3 </li> <li> The Company 2 The largest papermaker in Mxico A competitive company in the international compass, in operations, processes, products and capital cost Positioned to benefit from the next cycle of recovery of the national economy and of the international paper industry 1 2 3 CORPORACIN DURANGO Combined sales for $ 1,000 millions of dollars during the last twelve months 4 </li> <li> Slide 4 </li> <li> Corporacin Durango: through Grupo Industrial Durango, is the largest manufacturer of brown papers in Mexico; is the largest national producer of newsprint through Grupo Pipsamex; its packaging division, Empresas Titn, is the largest manufacturer of corrugated packaging in Mexico; is the Mexican paper company with the largest industrial operations in the United States, with Durango-McKinley Paper Company; and is also one of the largest manufacturers of bleached paper for writing and printing and paper sacks for the national cement and food industry in Mexico. Corporate Profile CORPORACIN DURANGO 3 </li> <li> Slide 5 </li> <li> Operational Organization CORPORACIN DURANGO SALES CONTRIBUTION PER SEGMENT RESULTS CONTRIBUTION PER SEGMENT BROWN PAPERS NEWSPRINT BOND PACKAGING BROWN PAPERS NEWSPRINT BOND PACKAGING 32% 13% 42% 13% 14% 20% 19% 47% BROWN PAPERS NEWSPRINT BOND CORRUGATED CONTAINERS PACKAGING AND SACKS FORMS NOTEBOOKS BROWN PAPER CORRUGATED CONTAINERS 1st. Half, 2005 DIVISION PAPER DIVISION PAPER PRODUCTS DIVISION PAPER PRODUCTS DIVISION PAPER GRUPO INDUSTRIAL DURANGO PIPSA-MEX GRUPO T I T A N EMPRESAS FORMA-TODO McKINLEY PAPER McKINLEY CONTAINER CORPORACIN DURANGO 4 </li> <li> Slide 6 </li> <li> 5 The Company / Leadership CORPORACIN DURANGO 1,075 CORPORACIN DURANGO SMURFIT MEXICO GRUPO COPAMEX KIMBERLY CLARK 935 552 354 O E M 309 GRUPO GONDI 220 The Largest Papermaker in Mxico PACKAGING BROWN PAPERS 809 354 220 GRUPO DURANGO SMURFIT MEXICO GRUPO GONDI NEWSPRINT and B O N D 266 104 PIPSAOEM 609 430 240 TITANSMURFIT MEXICO GRUPO GONDI Thousands Tons PRODUCTION 2004 Based on Thousands Tons of Manufactured Paper in 2004 -Source: National Camera of Pulp and Paper Industry </li> <li> Slide 7 </li> <li> Building a World-Class Company Operating 40 industrial plants in Mxico and in the South of the United States 6 MONTERREY DURANGO CULIACAN GUADALAJARA QUERETARO CD. DE MEXICO TRES VALLES TUXTEPEC TAPACHULA CHIHUAHUA PREWITT MEXICALI NOGALES ALBUQUERQUE EL PASO DALLAS RIO BRAVO HOUSTON REGIONAL PRESENCE MARKET U.S. 22% MEXICO 78% THE COMPANY PHOENIX BAJIO Particleboard Plant Cellulose Plant Paper Mill Packaging Plant Wastepaper Collecting Center to Recycle Headquarter Offices NAFTA * * * * * * * 40 industrial plants in Mexico and US * * CORPORACIN DURANGO </li> <li> Slide 8 </li> <li> Strategic Reengineering CORPORACIN DURANGO STRATEGIC REENGINEERING 2002 - 2004 7 </li> <li> Slide 9 </li> <li> Strategic Reengineering Business Strategic Plan (2002 2004 ) 1- 2- 3- F INANCIAL R EENGINEERING O PERATIONAL R EENGINEERING O RGANIZATIONAL R EENGINEERING 8 CORPORACIN DURANGO HARD TIMES... Times of Opportunities </li> <li> Slide 10 </li> <li> 12 Incorporate advanced technology in systems, operations and processes to optimize and simplify the operational and administrative structure, rationalize operations, improve processes, reduce costs and improve the productivity of the company" OBJECTIVES Organizational Reengineering (2002 2005) " CORPORACIN DURANGO ORGANIZATIONAL REENGINEERING... objective achieved Redesign an organizational structure into a flatter, thinner, more balanced and more focused one Reduction of personnel from 8,174 in 2000 to 7,551 in June 2005, a reduction of 623 persons Real Increase of 26.0% in the productivity (Production/Personnel) of the human resource ACHIEVEMENTS: An E fficient </li> <li> Slide 14 </li> <li> Outlook CORPORACIN DURANGO OUTLOOK 2005 - 2010 13 </li> <li> Slide 15 </li> <li> 14 Paper Industry CORPORACIN DURANGO Highly intensive in Investment (1.5 : 1.0) Sensitive to economy cycles Sensitive to the balance global offer-demand Sensitive to the cost of energy Sensitive to the volatility of international raw material cost (China) Cyclical in profitability (1.0 : 2.0) All of this establishes a high barrier for new participants to enter in the new sector Today, a new generation of leaders is in charge of the international industry, highly oriented to reach a competitive a return for investment Recovery of the industry profitability to be expected in the last quarter 2006 Attractive perspective of return of investment in the industry in a middle term, in line with other industrial branches intensive in capital </li> <li> Slide 16 </li> <li> 15 Strengths and Competitive Advantages CORPORACIN DURANGO Market leader Competitive structure of cost of production Economy of scale Latest technology High vertical integration International synergies Competitive products and services Wide net of production and national distribution Exposure to markets of high growth Diversification of products, markets and costumers Solid business relationship with an important foundation of national and international costumers Low cost of capital Financial flexibility Public Company listed in the Mexican Stock exchange Market (CODUSA) and regulated by the Securities and Exchange Commission (SEC) The best management practices and corporate governance Business Transparency Intellectual capital of high growth, proved in crisis Ecological company and socially responsible COMPANY FUNDAMENTALS LOW PRODUCTION COST LOW COST OF CAPITAL MARKET LEADER CORPORACIN DURANGO </li> <li> Slide 17 </li> <li> During the last 20 years, the company has been writing a story of growth and development in the paper industry, distinguishing itself for its ability to successfully endure recurring crises in the Mexican and international economies, as well as crises in its own industry, emerging from these with improved competitive advantages in a challenging world where the only constant is change. Conclusions CORPORACIN DURANGO 16 </li> <li> Slide 18 </li> <li> CORPORACIN DURANGO, S.A. DE C.V.... Building a world class company </li> </ul>