M-REAL KIRKNIEMI STARTS RATIONALISATION


M-real Corporation Stock Exchange Bulletin 31.10.2003 at 10.15

M-REAL KIRKNIEMI STARTS RATIONALISATION NEGOTIATIONS

M-real Corporation’s Kirkniemi mill will start rationalisation
negotiations concerning the entire personnel. The company needs to
boost the efficiency of the mill’s operations and lower costs in
order to maintain competitiveness. The estimated staff reduction
requirement is a total of 180 employees. The redundancies are to be
implemented by the end of 2005. At present, about 850 people work at
the Kirkniemi mill.

The grounds for starting rationalisation negotiations are the planned
closure of the Kirkniemi mill’s older groundwood plant, the changing
operational model for maintenance as well as productivity and
economical reasons.

According to plans, the procurement of mechanical pulp at the
Kirkniemi mill changes. The mill’s older groundwood plant will be
closed and the pulp needed will be obtained from M-real’s chemi-
thermo mechanical pulp mills. Closure of the groundwood plant will
not only lead to redundancies in the production personnel but will
also reduce the need for maintenance staff.

The mill’s old groundwood plant is at the end of its technical duty
life and modernizing it would call for substantial capital
expenditures. The groundwood plant has high operating costs and its
environmental impact is considerable compared with the use of chemi-
thermo mechanical pulp. It is estimated that operations at the
groundwood plant will be wound up in September 2005.

Maintenance at the mill will also be stepped up by means of a new
operational model that will reduce the repair need and fault level
thanks to the established policy of preventive maintenance. Tasks
will be scheduled for efficient use of available resources through
the use of a systematic approach that is made possible by modern
Enterprise Resource Planning (ERP) systems. The adoption of the new
operational model starts at the beginning of 2004.


M-REAL CORPORATION

Jouko M. Jaakkola
President and CEO


For additional information, contact Mill Manager Juhani Pöhö, tel.
+358 10 464 2475, GSM +358 50 598 7607



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