SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16
OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of Aug, 2007
Durango Corporation
(f/k/a Grupo Industrial Durango, S.A. de C.V.)
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(Translation of registrant's name into English)
Torre Corporativa Durango, Potasio 150, Cuidad Industrial,
Durango, Durango, Mexico
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F. Form 20-F [x] Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934. Yes No [x]
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-_____________.
CORPORACION DURANGO AND REPORTING GUARANTOR GROUP
PARTIALLY CONSOLIDATED CONDENSED BALANCE SHEETS
AS OF DECEMBER 31, 2006 AND JUNE 30, 2007 (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF JUNE 30, 2007
(Stated in thousands of Pesos and Dollars)
US$ DLLS.
December 31, Jun 30, Jun 30,
2006 2007 2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ........................$ 334,469$ 343,971 31,865
Accounts receivable, net ......................... 1,370,624 1,374,846 127,364
Other assets ..................................... 2,169 2,156 200
Inventories, net ................................. 870,599 848,982 78,649
Prepaid expenses ................................. 15,654 14,773 1,369
Total current assets ................... 2,593,515 2,584,728 239,446
LONG-TERM RELATED PARTIES .......................... 26,077 17,624 1,633
PROPERTY, PLANT AND EQUIPMENT, net ................. 7,336,112 7,452,959 690,434
INVESTMENT IN SUBSIDIARIES ......................... 3,883,891 3,853,915 357,022
OTHER ASSETS, net .................................. 206,747 202,218 18,733
Total assets ..........................$ 14,046,342$ 14,111,444 1,307,269
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank loans and current portion of long-term debt . 170,472 169,230 15,677
Interest payable ................................. 1,950 1,701 158
Trade accounts payable ........................... 446,209 401,917 37,233
Notes payable .................................... 45,117 31,762 2,942
Accrued liabilities .............................. 505,051 538,436 49,880
Employee profit-sharing .......................... 882 1,761 163
Total current liabilities ............. 1,169,681 1,144,807 106,054
LONG-TERM DEBT ..................................... 5,572,507 5,339,126 494,611
LONG-TERM RELATED PARTIES .......................... 647,350 617,292 57,185
LONG-TERM NOTES PAYABLE ............................ 122,340 130,561 12,095
DEFERRED TAXES...................................... 1,382,460 1,519,239 140,741
LIABILITY FOR EMPLOYEE BENEFITS..................... 301,712 302,801 28,051
Total long term liabilities ............ 8,026,369 7,909,019 732,683
Total liabilities ..................... 9,196,050 9,053,826 838,737
STOCKHOLDERS' EQUITY:
Majority interest ................................ 4,829,172 5,029,646 465,941
Minority interest ................................ 21,120 27,972 2,591
Total stockholders' equity ............. 4,850,292 5,057,618 468,532
Total liabilities and stockholders' equi$ 14,046,342$ 14,111,444 1,307,269
Exchange rate: $ 10.7946
CORPORACION DURANGO AND REPORTING GUARANTOR GROUP
PARTIALLY CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN FINANCIAL POSITION (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF JUNE 30, 2007
(Stated in thousands of Pesos and Dollars)
*
Full Year Acum. Jun Acum. Jun
2006 2007 US$ 2007
OPERATING ACTIVITIES:
Net income (loss) ..............................................$ -69,739$ 124,715 11,553
Add (deduct)- Charges (credits) to income which do
not require (generate) resources:
Loss (Gain) in subsidiaries ............................. -218,147 -110,884 -10,272
Depreciation and amortization ........................... 257,853 141,636 13,121
Impairment of long-lived assets ......................... 228,829 0 0
Deferred income taxes ................................... 185,432 98,597 9,134
Other.................................................... 42,347 22,191 2,056
Total items which do not require cash.................... 496,314 151,540 14,039
Net resources generated from income .......................... 426,575 276,255 25,592
Changes in operating assets and liabilities:
Decrease (Increase) in inventories ......................... -44,549 21,617 2,003
Decrease (Increase) in current assets ...................... 55,550 -10,346 -958
Decrease (increase) in account receivables, net ............ -238,706 7,018 650
(Decrease) increase in accounts payable and
accrued liabilities ...................................... 266,332 -23,632 -2,189
Resources generated by operating activities .................. 465,202 270,912 25,097
FINANCING ACTIVITIES:
Increase (Decrease) in bank loans and others ............ -394,531 -194,323 -18,002
Net resources generated from financing activities ............ -394,531 -194,323 -18,002
INVESTMENT ACTIVITIES:
Acquisition and sale of property, plant and equipment.... -220,200 -65,833 -6,099
Investment in subsidiaries .............................. 1,042 0 0
Increase in deferred assets ............................. -41,545 -1,254 -116
Net resources applied to investing activities ................ -260,703 -67,087 -6,215
INCREASE IN CASH AND CASH EQUIVALENTS .......................... -190,032 9,502 880
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD............ 524,501 334,469 30,985
CASH & CASH EQUIVALENTS AT END OF THE PERIOD ...................$ 334,469$ 343,971US 31,865
* The exchange rate of 10.7946 was used for translation purposes.
CORPORACION DURANGO AND REPORTING GUARANTOR GROUP
PARTIALLY CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF JUNE 30, 2007
Thousands of Pesos Thousands of Dollars
2Q 2Q 2Q 2Q
2006 2007 Var 2006 2007 Var
NET SALES ...............................$ 1,412,797$ 1,383,812 -2% 120,536 128,195 6%
COST OF SALES ........................... 1,149,827 1,142,242 -1% 98,100 105,816 8%
Gross profit........................ 262,970 241,570 -8% 22,436 22,379 0%
Selling and Administrative expenses 122,213 122,061 0% 10,427 11,308 8%
Operating income ................... 140,757 119,509 -15% 12,009 11,071 -8%
Other income (expense), net ............. 79,646 34,134 -57% 6,795 3,162 -53%
Employee statutory profit sharing ....... 0 891 N/A 0 83 N/A
INTEGRAL RESULT OF FINANCING:
Interest expense ........................ 172,264 147,120 -15% 14,697 13,629 -7%
Interest income ......................... -10,631 -4,990 -53% -907 -462 -49%
Exchange (gain) loss, net ............... 259,846 -148,044 N/A 22,169 -13,715 N/A
Gain on monetary position ............... 7,206 35,652 395% 615 3,303 437%
Total financial expense ............... 428,685 29,738 -93% 36,574 2,755 -92%
Income (loss) after R.I.F.............. -208,282 123,014 N/A -17,770 11,395 N/A
Loss (Gain) in subsidiaries ............. -21,781 -111,991 414% -1,816 -10,376 471%
Income (loss) before income and asset t -186,501 235,005 N/A -15,954 21,771 N/A
Provisions for income and asset taxes ... 4,754 9,644 103% 406 893 120%
Provision for deferred income taxes ..... -59,641 93,563 N/A -5,088 8,668 N/A
Net income before minority interest......$ -131,614$ 131,798 N/A -11,272 12,210 N/A
Minority interest...................... -1,111 -2,745 N/A -95 -254 N/A
Majority net income....................$ -130,503$ 134,543 N/A -11,177 12,464 N/A
CORPORACION DURANGO AND REPORTING GUARANTOR GROUP
PARTIALLY CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF JUNE 30, 2007
Thousands of Pesos Thousands of Dollars
Ac Ac Ac Ac
2006 2007 Var 2006 2007 Var
NET SALES ...............................$ 2,597,861$ 2,761,299 6% 225,389 253,595 13%
COST OF SALES ........................... 2,101,110 2,226,824 6% 182,268 204,551 12%
Gross profit........................ 496,751 534,475 8% 43,121 49,044 14%
Selling and Administrative expenses 233,673 241,838 3% 20,289 22,212 9%
Operating income ................... 263,078 292,637 11% 22,832 26,832 18%
Other income (expense), net ............. 134,492 101,203 -25% 11,648 9,268 -20%
Employee statutory profit sharing ....... 0 891 N/A 0 83 N/A
INTEGRAL RESULT OF FINANCING:
Interest expense ........................ 337,739 326,422 -3% 29,338 29,952 2%
Interest income ......................... -25,077 -18,829 -25% -2,185 -1,722 -21%
Exchange (gain) loss, net ............... 435,666 4,512 -99% 37,726 173 -100%
Gain on monetary position ............... -47,715 -41,228 -14% -4,244 -3,696 -13%
Total financial expense ............... 700,613 270,877 -61% 60,635 24,707 -59%
Income (loss) after R.I.F.............. -303,043 122,072 N/A -26,155 11,310 N/A
Loss (Gain) in subsidiaries ............. -2,606 -110,884 4155% -121 -10,282 8398%
Income (loss) before income and asset t -300,437 232,956 N/A -26,034 21,592 N/A
Provisions for income and asset taxes ... 6,006 9,644 61% 517 893 73%
Provision for deferred income taxes ..... -59,768 98,597 N/A -5,099 9,126 N/A
Net income before minority interest......$ -246,675$ 124,715 N/A -21,452 11,573 N/A
Minority interest...................... -1,190 18,954 N/A -102 1,721 N/A
Majority net income....................$ -245,485$ 105,761 N/A -21,350 9,852 N/A
CORPORACION DURANGO, S.A.B. DE C.V. AND REPORTING GUARANTOR GROUP
COMPLEMENTARY NOTES TO THE FINANCIAL INFORMATION
THE ENTITY:
CORPORACION DURANGO, S. A. B. DE C. V. ("CODUSA") AND SUBSIDIARIES
(COLLECTIVELY, THE "COMPANY") ARE PRIMARILY ENGAGED IN THE MANUFACTURING
AND SELLING OF PACKAGING (CORRUGATED BOXES AND MULTI-WALL SACKS), PAPER
(CONTAINERBOARD, NEWSPRINT AND BOND) AND OTHER WOOD PRODUCTS (PLYWOOD)
IN MEXICO AND IN THE UNITED STATES OF AMERICA.
ON DECEMBER 8, 2006, THE BOARD OF DIRECTOR'S DECIDED TO MODIFY THE SOCIAL
DENOMINATION OF COPORACION DURANGO, S. A. DE C. V. TO CORPORACION DURANGO,
S. A. B. DE C. V.; ALSO, THEY MODIFIED ITS SOCIAL STATUTES TO REFLECT THE
NEW INTEGRATION, ORGANIZATION AND OPERATION OF ITS SOCIAL ORGANS AND THE
NEW RIGHTS OF THE MINORITY STOCKHOLDERS, IN ACCORDANCE TO MEXICAN LAW OF
STOCK MARKET, PUBLISHED ON DECEMBER 30, 2005.
SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL POLICIES:
FOLLOWING IS A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOLLOWED BY THE
COMPANY IN THE PREPARATION OF THE PARTIALLY - CONSOLIDATED FINANCIAL
STATEMENTS.
1.1 CONSOLIDATION BASIS:
THE PARTIALLY - CONSOLIDATED FINANCIAL STATEMENTS INCLUDE THE FINANCIAL
STATEMENTS OF CORPORACION DURANGO, S.A.B. DE C.V. AND THE FOLLOWING
SUBSIDIARIES:
ADMINISTRACION CORPORATIVA DE DURANGO, S.A. DE C.V.
EMPAQUES DE CARTON TITAN, S.A. DE C.V.
PONDEROSA INDUSTRIAL DE MEXICO, S.A. DE C.V.
ALL SIGNIFICANT INTERCOMPANY BALANCES AND TRANSACTIONS HAVE BEEN
ELIMINATED FOR CONSOLIDATION PURPOSES. THE PARTIALLY - CONSOLIDATED
FINANCIAL STATEMENTS INCLUDE THE ASSETS, LIABILITIES AND INCOME OR LOSS
OF THE PARENT COMPANY AND THE SUBSIDIARIES WITH MORE THAN 50% OF
OWNERSHIP.
BEGINNING JANUARY 1, 2007, THE DISPOSITIONS OF THE FOLLOWING MEXICAN
FINANCIAL REPORTING STANDARDS (NIFS) ISSUED BY THE MEXICAN FINANCIAL
REPORTING STANDARDS BOARD (CINIF) BECAME EFFECTIVE. THESE DISPOSITIONS
WILL NOT HAVE A SIGNIFICANT IMPACT ON THE FINANCIAL INFORMATION:
NIF B-3 "INCOME STATEMENT" - INCORPORATES, AMONG OTHERS, A NEW APPROACH
TO CLASSIFY INCOME COSTS AND EXPENSES IN ORDINARY AND NON-ORDINARY,
ELIMINATES SPECIAL AND EXTRAORDINARY ITEMS AND ESTABLISHES EMPLOYEES'
PROFIT SHARING AS ON ORDINARY EXPENSE AND NOT AS A PROFIT TAX.
NIF B-13 "SUBSEQUENT EVENTS" - REQUIRES, AMONG OTHERS, RECOGNITION OF
ASSETS AND LIABILITIES RESTRUCTURING IN THE PERIODS IN WHICH THEY
ACTUALLY TAKE PLACE AND THE RECOGNITION OF CREDITORS' WAIVERS TO ENFORCE
THEIR RIGHT TO DEMAND DEBTS IN THE EVENT OF LACK OF COMPLIANCE OF THE
ENTITY WITH DEBT AGREEMENT COMMITMENTS. THESE ISSUES WILL ONLY BE
DISCLOSED IN THE NOTES TO THE FINANCIAL STATEMENTS.
NIF C-13 "RELATED PARTIES" - EXTENDS, AMONG OTHERS, THE DEFINITION (SCOPE)
OF THE RELATED PARTIES' CONCEPT AND INCREASES THE DISCLOSURE REQUIREMENTS
IN THE NOTES TO THE FINANCIAL STATEMENTS.
NIF D-6 "CAPITALIZATION OF THE FINANCING INTEGRAL RESULT" - ESTABLISHES,
AMONG OTHERS, THE OBLIGATION OF CAPITALIZATION OF THE FINANCING INTEGRAL
RESULT AND THE RULES FOR ITS CAPITALIZATION.
1.2 BASIS FOR COMPARISSON EFFECTS IN THE FINANCIAL STATEMENTS:
A) THE PARTIALLY CONSOLIDATED FINANCIAL STATEMENTS HAVE BEEN PREPARED
IN ACCORDANCE WITH THE MEXICAN FINANCIAL REPORTING STANDARDS ("NIFS"),
ISSUED BY THE MEXICAN BOARD FOR RESEARCH AND DEVELOPMENT OR FINANCIAL
REPORTING STANDARDS ("CINIF").
B) FOR COMPARATIVE PURPOSES UNCONSOLIDATED FINANCIAL STATEMENTS OF PRIOR
YEARS HAVE ALSO BEEN RESTATED TO REFLECT IDENTICAL PURCHASING POWER,
USING FACTORS DERIVED FROM CHANGES IN THE NATIONAL CONSUMER PRODUCTS
INDEX ("NCPI") ISSUED BY BANCO DE MEXICO.
1.3 VALUATION OF TEMPORARY INVESTMENTS:
THESE INVESTMENTS ARE REALIZABLE WITHIN THREE MONTHS AND ARE VALUED AT
MARKET PRICE. THE INCOME OR LOSS GENERATED IS INCLUDED IN THE STATEMENTS
OF OPERATIONS.
1.4 RIGHTS AND LIABILITIES VALUATION IN FOREIGN CURRENCY:
ASSETS AND LIABILITIES IN FOREIGN CURRENCY, MAINLY IN AMERICAN DOLLARS,
ARE EXPRESSED IN MEXICAN PESOS AT THE CLOSING OF THE YEAR'S EXCHANGE RATE.
THE EXCHANGE RATE ON JUNE 30st, 2007 WAS $10.7946.
1.5 INVENTORY VALUATION:
INVENTORIES AND COST OF SALES ARE STATED USING THE AVERAGE COST METHOD
AND ARE LATER RESTATED USING FACTORS DERIVED FROM CHANGES IN THE NCPI AT
ITS REPOSITION COST BASED ON THE MOST RECENT PURCHASE PRICE OR PRODUCTION
COST. THE VALUE SHOULD NOT EXCEED ITS MARKET VALUE.
PROPERTY, PLANT AND EQUIPMENT:
PROPERTY, PLANT AND EQUIPMENT OF MEXICAN ORIGIN ARE RECORDED AT
ACQUISITION COST AND ARE RESTATED TO REFLECT MEXICAN PESOS OF CONSTANT
PURCHASING POWER USING FACTORS DERIVED FROM CHANGES IN THE NATIONAL
CONSUMER PRICE INDEX (NCPI).
MACHINERY AND EQUIPMENT OF NON-MEXICAN ORIGIN ARE RECORDED AT
ACQUISITION COST AND THE ACQUISITION COST IS RESTATED TO CONSTANT
CURRENCY USING THE INFLATION OF THE COUNTRY OF ORIGIN, THEN CONVERTED
INTO MEXICAN PESOS AT THE EXCHANGE RATE IN EFFECT AT THE BALANCE
SHEET DATE.
DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT, IS CALCULATED BASED ON
UNITS PRODUCED IN THE PERIOD IN RELATION TO THE TOTAL ESTIMATED
PRODUCTION OF THE ASSETS OVER THEIR SERVICE LIVES. ASSETS ARE
DEPRECIATED AS FOLLOWS:
YEARS
BUILDINGS 25-50
MACHINERY & EQUIPMENT 23-40
OFFICE EQUIPMENTS 5-10
TRANSPORTATION EQUIPMENT 1-5
COMPUTER EQUIPMENT 1-3
THESE ASSETS ARE EVALUATED ANNUALLY FOR POTENTIAL IMPAIRMENT.
RECURRING MAINTENANCE AND REPAIR EXPENDITURES ARE CHARGED TO OPERATING
EXPENSES AS INCURRED. MAJOR OVERHAULS TO FIXED ASSETS ARE CAPITALIZED
AND AMORTIZED OVER THE PERIOD IN WHICH BENEFITS ARE EXPECTED TO BE RECEIVED.
NET COMPREHENSIVE FINANCING COST INCURRED DURING THE PERIOD OF CONSTRUCTION
AND INSTALLATION OF PROPERTY, PLANT AND EQUIPMENT IS CAPITALIZED AND
RESTATED APPLIYING FACTORS DERIVED FROM CHANGES IN THE NCPI.
LABOR OBLIGATIONS:
AS OF JANUARY 1, 2005, THE COMPANY ADOPTED AMENDMENTS TO STATEMENT D-3,
"LABOR OBLIGATIONS", WHICH, ESTABLISHES RULES FOR ESTIMATING AND RECORDING
LIABILITIES RELATED TO SEVERANCE PAYMENTS DUE TO EMPLOYEES UPON DISMISSAL
FOR CAUSES OTHER THAN FINANCIAL RESTRUCTURING. THESES EFFECTS ARE RECOGNIZED
THROUGH ACTUARIAL CALCULATIONS USING THE PROJECTED CREDIT UNIT METHOD.
OTHER COMPENSATION BASED ON SENORITY TO WHICH EMPLOYEES ARE ENTITLED IN THE
EVENT OF DISMISSAL OR DEATH, IN ACCORDANCE WITH THE MEXICAN FEDERAL LABOR
LAW, ARE CHARGED TO INCOME IN THE YEAR IN WHICH THEY BECOME PAYABLE.
STOCKHOLDERS' EQUITY:
COMMON STOCK, LEGAL RESERVE, PREMIUM IN ISSUANCE OF SHARES AND RETAINED
EARNINGS REPRESENT THE VALUE OF THOSE ITEMS IN TERMS OF PURCHASING POWER OF
THE MEXICAN PESO AS OF THE MOEST RECENT BALANCE SHEET DATE, AND ARE
DETERMINED BY APPLYING FACOTRS DERIVED FROM THE NCPI TO THE HISTORICAL
VALUES.
SHARES OF COMMON STOCK AT PAR VALUE, ARE COMPRISED AS FOLLOWS:
AMOUNT NUMBER OF SHARES
FIXED PORTION 982,074 65,419,089
VARIABLE PORTION 678,873 45,222,022
---------- ------------
1,660,947 110,641,111
INCOME TAX:
INCOME TAX IS RECORDED BY THE COMPREHENSIVE METHOD OF ASSETS AND LIABILITIES,
WHICH CONSISTS OF RECORDING DEFERRED TAX FOR ALL TEMPORARY DIFFERENCES
BETWEEN THE BOOK AND TAX VALUES AF ASSETS AND LIABILITIES.
BUSINESS SEGMENTS INFORMATION:
THE PROVISIONS CONTAINED IN STATEMENT B-5, "FINANCIAL INFORMATION BY SEGMENT",
ISSUED BY MIPA ARE MANDATORY FOR PUBLIC ENTITIES LISTED ON THE MEXICAN STOCK
EXCHANGE. STATEMENT B-5 REQUIRES THAT COMPANIES LOOK TO THEIR INTERNAL
ORGANIZATIONAL STRUCTURE AND INTERNAL REPORTING SYSTEM FOR PURPOSES OF
IDENTIFYING SEGMENTS.
THE COMPANY OPERATES THE FOLLOWING BUSINESS SEGMENTS:
1. PACKAGING. THIS SEGMENT INCLUDES THE PRODUCTION AND SALES OF CORRUGATED
CONTAINERS, MULTI-WALL SACKS AND PAPER TUBES.
2. PAPER. THIS SEGMENT INCLUDES THE PRODUCTION AND SALES OF CONTAINERBOARD
(LINERBOARD AND CORRUGATING MEDIUM).
3. OTHER. THIS SEGMENT INCLUDES THE PRODUCTION AND SALE OF PLYWOOD.
AS OF JUNE 30st., 2007 AND 2006, THE SEGMENT INFORMATION IS PRESENTED AS
FOLLOWS:
ACQUISITION
AND SALE OF
TOTAL PROPERTY, PLANT SEGMENT
2007 INCOME AND EQUIPMENT ASSETS
------ --------- ---------------- --------------
PACKAGING 2,659,154 55,796 21,687,533
PAPER 730,783 9,971 10,272,416
OTHERS 98,840 66 510,700
ELIMINATONS (722,478) (18,359,205)
---------- ------------ --------------
TOTAL 2,761,299 65,833 14,111,444
========== ============ ==============
ACQUISITION
AND SALE OF
TOTAL PROPERTY, PLANT SEGMENT
2006 INCOME AND EQUIPMENT ASSETS
------ --------- ---------------- --------------
PACKAGING 2,319,396 7,972 31,280,032
PAPER 1,570,900 51,851 9,382,376
OTHERS 59,379 128,646 535,660
ELIMINATIONS (1,351,814) (26,418,871)
---------- ------------ --------------
TOTAL 2,597,861 188,469 14,779,197
========== ============ ==============
THE FINANCIAL INFORMATION PRESENTED ABOVE IS USED IN THE DECISITION
MAKING PROCESS BY THE COMPANY.
INTERNAL CONTROL:
THE COMPANY HAS STARTED IMPLEMENTATION ON THE SARBANES OXLEY ACT WITH
THE ADVISE OF EXPERT ADVISORS.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CORPORACION DURANGO, S.A.B. DE C.V.
Date: Aug 3, 2007 By /s/ Mayela Rincon de Velasco
--------------------------------
Name: Mayela Rincon de Velasco
Title: Chief Financial Officer