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Former tax commissioner Eitan Rub is apparently the lead candidate to replace Yaki Yerushalmi as chairman of American Israeli Paper Mills  (TASE, Amex: AIP). The official choice will be brought before the relevant company organs in January 2007, when Rub's cooling-off period after his work in government ends.

Rub is considered to be an aggressive manager with a skill for strengthening his status. He began at the Finance Ministry as head of the VAT & Customs department, and expanded his authority to the income tax office as well. One may assume that as chairman of AIP, he'd be a dominant presence.

In fact, Yerushalmi has already left and the company has been chaired by Zvi Livnat for the time being.

In May Yerushalmi stepped down after many years at the company. Rub is one candidate to replace him, Livnat is another.

In other AIP news, on Monday it said it will invest about $140 million on a new machine for the production of packaging paper from recycled paper and board.

The machine, to be installed at the company's facility in Hadera, Israel, will have a capacity of about 230,000 tons per year.

After installing the unit, which is planned to start production in 2009, and shutting down one of the two machines currently working, the company's capacity in packaging paper is expected to increase to 330,000 tons annually from 150,000 tons, it said.

The company, which has not decided on financing of the project, said the production increase will improve its long-term profitability.