Componenta examining options for developing operations at Pietarsaari

Componenta Corporation Stock Exchange Release 25.1.2011 at 8.40

To achieve its strategic goals of growing together with customers and being the preferred casting solutions provider for its customers, Componenta has to have competitive, profitable operations with a corporate structure that supports them.

The profitability of Componenta’s foundry and machine shop business units in Pietarsaari has been poor for the past few years. In future, production volumes at these units and their profitability will also be affected by strategic changes that have taken place at heavy truck manufacturing customers and purchasing decisions bases on those. They will also be impacted by the product transfers to be made from Pietarsaari to Orhangazi in Turkey that are in accordance with the DISA strategy announced in autumn 2009 and will mostly be completed by summer 2011. As a result of these changes, production of several major product families will end at the Pietarsaari foundry and machine shop. Componenta is also strengthening its cast component supply chain by concentrating operations at larger production units, and evaluates possible cooperation in machining with Finnish subcontractors.

In consequence of these changes, Componenta is starting personnel negotiations, as stipulated in the Finnish Act on Cooperation in Undertakings, in Pietarsaari on 25 January 2011. The negotiations are to assess the impact of the changes mentioned above on foundry and machining operations in Pietarsaari, on the volume of business and the number of personnel. The areas to be discussed in the negotiations are the possible closing down of the machine shop business unit in Pietarsaari and the impact of transfers of machine shop machinery and products to Främmestad, Sweden, and Orhangazi, Turkey.

If these changes are carried out they will have an impact on personnel, which is estimated to mean a reduction of some 120 employees in foundry and machine shop operations in Pietarsaari, where about 290 people are currently employed. One-time costs are EUR 3 million during the first quarter of 2011 and the costs for investment and product transfers about EUR 1 million during 2011.

The negotiations as laid down in the Act on Cooperation in Undertakings do not affect the Pistons business unit that also operates in Pietarsaari.

In December 2010, Componenta launched a project in Pietarsaari to develop the competitiveness of the foundry, aiming to significantly improve productivity and quality, raise efficiency in various functions, and develop technology in various ways, including investments. The project comprises the following five areas: strengthening capabilities, enhancing maintenance, improving quality, applying new technology, and enhancing the engineering function. The Componenta Group management is actively supporting the development project along with the management of the Pietarsaari business units and experts.

Helsinki, 25 January 2011

COMPONENTA CORPORATION

Heikki Lehtonen
President and CEO

Further information:

Heikki Lehtonen
President and CEO
tel. +358 10 403 00

Componenta is a metal sector company with international operations and production plants located in Finland, Turkey, the Netherlands and Sweden. The net sales of Componenta were EUR 452 million in 2010. The Group employs approx. 4,400 people. Componenta's shares are quoted on the NASDAQ OMX Helsinki. Componenta specializes in supplying cast and machined components and total solutions made of them to its global customers who are manufacturers of vehicles, machines and equipment.  

Componenta Corporation
Panuntie 4
FI-00610 Helsinki, Finland
Tel. +358 10 403 00
Fax +358 10 403 2721
www.componenta.com