Orient Paper Inc. Signs Letter of Intent to Acquire Environmental Protection and Energy Saving Projects

Orient Paper Inc. (OTCBB: OPAI), a large paper milling manufacturer based in the Hebei Province of China (the “Company”), announced today that the Company has issued a merger offer to Inner Mongolia Shangdu Paper Milling Company, Ltd. (“Shangdu”), with the intent to acquire the environmental protection and energy saving projects developed by Shandu Paper Milling Company: salix psammophila pulp production and alkali recycling. Salix psammophila is a desert shrub native to China that grows up to 4m in height, and is commonly used for weaving wicker articles and stabilizing sand. Using pulp made from salix psammophila to mill paper, the Shangdu project is producing cultural paper at a rate of 70,000 tons annually, in conjunction with the supporting project that employs recycled black liquid alkali that used to bleach the salix psamophila pulp. The Shangdu project processes 200 tons of pulp and 68.5 tons of recycled alkali daily. These two projects are approved with the [2003]245 document issued by Inner Mongolia Autonomous Region Development and Reform Commission.

The management of Orient Paper stated, “The most attractive point of these projects is the environmental protection advantage. Utilizing the desert shrub Salix psammophila for the purposes of paper production has several major environmental advantages. First, the Salix has the potential to constitute a substantial source of raw material for the rapidly expanding paper industry that is currently dependent upon the consumption of timber. In addition, reforestation with the Salix shrub can take advantage of the significant anti-desertification properties of the plant that not only can provide high quality raw material for paper milling industry, but also effectively restore desert vegetation, forming a new pattern of industrialization using paper to raise forests and using forests to control desertification. This project aims to achieve the reunification of economic efficiency, ecological benefits and social benefits.”

As of October, 2007, the total capital of the projects was $51 million, in which the fixed assets invested were $39 million and the current assets invested were $12 million. The plant occupies an area of 446,500 square meters and the facility and the public construction area cover 62,000 square meters. Shangdu possess a pulp production line with an actual annual production capacity of 90,000 tons, 4 eight-cylinder long network paper production machines, 2 multi-cylinder long network paper production machines, 3 steam pots with a capacity of 35 tons, 1 recycled alkali burning stove with supporting evaporation and exorbitant equipment and sewage treatment facilities which has a sewage processing daily capacity of 30,000 tons. There are 1036 employees in the company, among which 56 are management, 94 are technical staff and 886 are production workers. The annual sales income was $55 million with an income tax of $3.5 million and net income was $11.7 million.

Forward-Looking Statements

With the exception of historical information, the matters discussed in this press release and on our website referenced herein include forward-looking statements that involve a number of risks and uncertainties about Orient Paper and its subsidiaries and their respective businesses and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, the general economic and business conditions in the People’s Republic of China, future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competitors, changes in technology, and various other factors beyond its control. In some cases, you can identify forward-looking statements by use of words such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other similar words. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company’s reports filed with the Securities and Exchange Commission. Orient Paper undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.