Highlights from the 2007 Annual Report include:

• Net loss of $13.3 million ($0.28 per share) – various external factors affect results, but impact moderated by Company’s diversification strategy
• Discretionary investment program totaled $40 million; new mill approved for Adams Lake
• Queensboro curtailed indefinitely; several options currently being explored
• 1,220,100 Class A shares repurchased under Company’s share buy-back program
• Monetization program generated further $6.9 million
• Acquisition of Pope & Talbot’s B.C Southern Interior mills underway
• Two fatalities undermine significant improvements in safety performance
• Strong Balance Sheet maintained; new financing commitment obtained to increase Canadian lines of credit by $165 million to $215 million
• Co-recipient of the World Wildlife Fund’s Gift to the Earth Award

2007 was a challenging year for Interfor and every other company involved in the North American forest products industry. A collapse in new home construction in the United States along with other factors outside our control had a material impact on the Company’s financial performance. In spite of the difficult operating environment, the Company was able to make significant progress in 2007 in its efforts to position itself as one of North America’s leading lumber and building products companies.

Major projects were completed at Adams Lake and Port Angeles in 2007 and delivered impressive results.

• At Adams Lake, the new wood-fired energy system came on line in the 1st quarter of 2007, and delivered pro forma results within 2 months of start-up.
• At Port Angeles, the new double length primary breakdown line was also commissioned in the 1st quarter of 2007, with similarly impressive results. This project was supplemented with a new log merchandizing system and planer (complete with continuous tilt hoist) in the 4th quarter. The Port Angeles mill now stacks up as one of the most efficient and lowest cost stud mills in North America.

The projects completed at Adams Lake were part of a Master Plan for the facility which commenced in 2003. The final stage of the Plan – the construction of a new sawmill – was authorized by our Board of Directors in April. The project has a capital budget of $100 million and a production capacity estimated at 280 million board feet on a 2 shift basis. When completed, the new mill should be amongst the most competitive in the southern interior region of B.C.

In November, we announced an agreement to acquire three mills from Pope & Talbot Inc. The agreement involves the Castlegar and Grand Forks sawmills, which are capable of producing in the range of 460 million board feet, and the related timber tenures in the southern B.C. Interior. Their acquisition will add critical mass in one of our core operating regions and will broaden our product lines in both specialty and commodity grades. Also included in the agreement is a sawmill in Spearfish, South Dakota; an agreement has been reached to sell the Spearfish mill to a local operator. These transactions are expected to close concurrently in March or April, 2008.

Interfor’s balance sheet continues to be one of the strongest in the sector. At year-end, the Company had cash and deposits of $26.6 million, and net debt of $8.1 million, or 1.9% of invested capital. In February 2008 we obtained a financing commitment from our lenders to extend the maturity date of our credit facilities and to increase our Canadian lines of credit from $50 million to $215 million.

With its strong balance sheet and these credit lines in place, Interfor is well-positioned to weather a prolonged downturn in product markets and to fund our plans for growth.

On December 19th, Bill Sauder, Interfor’s founder and Chairman, passed away following a brief illness. Bill was a man of outstanding character and integrity who made a tremendous contribution to our Company, our industry and to the community-at-large. His presence and wise counsel will be missed by everyone at Interfor. To replace Bill, Interfor’s Board of Directors in early February 2008 elected Lawrence Sauder as the Company’s new non-executive chairman.

During 2008 we will follow the path laid out some years ago: to transform Interfor into one of North America’s leading lumber and building products companies. While additional care and attention will be required in face of uncertainty, we believe attractive opportunities will emerge over the course of the year to build value for the long-term. We intend to be in a position to take advantage of those opportunities.

Company Contact

For more information on Interfor, please contact:

John Horning, Senior Vice President, Chief Financial Officer and Corporate Secretary
International Forest Products Limited
PO Box 49114
Bentall Tower Four
3500-1055 Dunsmuir Street
Vancouver, BC V7X 1H7
T: 604 689 6829