M-REAL LAUNCHES PROGRAMME TO IMPROVE PROFITABILITY OF OPERATIONS IN FINLAND

M-real Corporation Stock Exchange Bulletin 6.2.2007


M-REAL LAUNCHES PROGRAMME TO IMPROVE PROFITABILITY OF OPERATIONS IN
FINLAND

Metsäliitto Group’s subsidiary M-real is starting up a programme to
improve the profitability of its operations in Finland. The programme
aims to achieve a full profit improvement of some 40 million euros
from the beginning of 2009. The measures to be taken will involve
almost all units, and it is estimated that implementing the programme
will reduce the number of employees by about 600 persons in addition
to those concerned by the presently ongoing programmes. As far as can
presently be seen, it will not be necessary to close any of the
production plants entirely. The realisation of the profit impact and
of the reduction of the number of personnel both depend on the
outcome of the statutory workplace consultations.

“M-real has today announced its result for 2006, which still shows
heavy losses. The restructuring programme announced on 18 October
2006, which is proceeding in many respects more rapidly than was
planned, focuses on M-real’s units outside Finland. The programme we
announced today aims to return M-real to profitability in our Finnish
units as well,” says CEO Mikko Helander.

A thoroughgoing re-engineering process has already begun with changes
in the top management as well as in the support functions in head
office, where the consultation process continues. The more extensive
profit improvement programme to be implemented in the Finnish mills
means that on 8 February M-real will present all personnel groups
with its proposal to start consultations in accordance with the
Finnish Act on Cooperation within Undertakings. The consultations
will concern M-real’s production units in Kirkniemi, Kyro, Kemi,
Simpele, Joutseno, Kaskinen, Kangas, Äänekoski, Lielahti and the Tako
carton plant in Finland.

The statutory consultations will start up in the week beginning on 12
February, and be concluded by the end of March at the latest. They
will be conducted in each unit and function by utilising local
knowledge. In the consultations, ways will be sought to make
operations profitable and thus to safeguard the continuation of
operations in the localities involved. In addition, M-real will also
discuss with the personnel groups and trade unions about “change
security” with regard to all personnel groups in the event of
personnel reductions.

“In cooperation with the representatives of the personnel, we want to
ensure that there will be at least one paper industry company in
Finnish hands in Finland in the future too, giving work to Finnish
people and processing Finnish wood. I believe that the programme
announced today will help us achieve that goal,” Mikko Helander
declares.

More information:
Mikko Helander, CEO, tel. +358 10 469 4300
Anne-Mari Achrén, Group Communications, tel. +358 10 469 4541


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