Componenta Främmestad takes action to ad

Componenta Corp. Stock Exchange Announcement 18.3.2003 at 12.00

Componenta Främmestad takes action to adjust costs

Componenta Främmestad AB is a machine shop belonging to
Componenta Group located in the municipality of Essunga in
Sweden. The company's operations expanded considerably during
the 1990s. In 2003 three of Främmestad's major customers have
simultaneously made significant changes to their production
strategies. These customers operate in the heavy truck and power
and transmission industries and supply their products mainly in
Europe.

The changes mean an annual reduction of some SEK 75 million in
production at Främmestad. According to the contracts, deliveries
of products will cease at the end of August 2003.

The reasons for the reductions affecting Främmestad are the
uncertain state of the world economy and increasing global
competition. One German customer, for example, has decided to
remove its products from Främmestad and transfer production to
its own production work, since this is suffering from a lack of
work. Several Scandinavian customers have begun to purchase
components from countries with lower costs, such as Brazil.

When volumes decline, the company also has to adjust its costs.
To cut personnel costs and improve competitiveness, notice of
possible redundancy has been given to 50 persons at Componenta
Främmestad.

The redundancy negotiations will be completed with the
assistance of trade unions during the coming month. At the same
time decisions will be made about investments in training, so
that in the future, when obtaining new orders, the company is
better equipped

Componenta Främmestad had net sales in 2002 of about SEK 290
million. At present the company has 172 employees.

Information about Componenta Group is available at
www.componenta.com

COMPONENTA FRÄMMESTAD AB

Karl-Gustav Setterberg
Managing Director
tel. +46 (0)512 57800, mobil +46 (0)70 55 04 395

COMPONENTA CORPORATION

Heikki Lehtonen
President and CEO
tel. +358 (0)9 225 021


 







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