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Quebecor World Expands in Brazil, Buys Book Printer

Press release from the issuing company

Sao Paulo and Montreal –3/27/01- Quebecor World Inc. announced today a significant expansion of its network in Latin America with the acquisition of Grafica Melhoramentos S.A., in Sao Paulo. The transaction means Quebecor World will soon have two facilities in Latin America’s largest economy. The Company is building another facility in Recife, Brazil’s fourth largest city. It will open shortly and will produce directories and magazines. Guy Trahan, President of Quebecor World Latin America stated, “Brazil has a young population and good economic growth. This is the right time to invest in the country and this investment will improve our service to customers in Brazil’s largest city. The transaction complements Quebecor World’s book network in Colombia, Peru and Mexico and its directory network in Recife, Brazil and Lima, Peru.” Quebecor World is acquiring 75% of Grafica Melhoramentos from Companhia Melhoramentos de Sao Paulo (CMSP), a leading Brazilian publisher and paper manufacturer. CMSP retains a 25% equity interest in the printer. Both companies are reinvesting in the printing company to expand its capacity and to enhance its service capabilities. Concurrently, Quebecor World and CMSP’s publishing arm have signed a printing agreement for eight years with a five-year option. Financial details were not released. Grafica Melhoramentos has annual sales of Brazilian Reais 32 million (US $16 million). Approximately 70% of the production is trade and textbooks, 15% magazines, 10% directories and catalogs and 5% commercial. Some of the key customers include Editora Melhoramentos, Barsa-Planeta, Saint Gobain, Reader’s Digest and Saraiva. There are approximately 280 employees at the 8,000 square metre Sao Paulo facility operating a range of web and sheet fed presses and hard and soft cover bindery equipment. Brazil has a population of 170 million people. Approximately 45% of the population are under 18 years old. The book printing market is valued at about US$ 500 million. Quebecor World is now well positioned to serve this growing demand. The facility in Sao Paulo can react to rapid delivery requirements in the country’s largest cities. Medium term deliveries can be met from Colombia, Peru and Mexico. New satellite links are being put into place which allow for quick and easy communication and data transfer from one Quebecor World location to another across the Latin American platform.