Componenta to merge operations of Alvest

COMPONENTA CORP. STOCK EXCHANGE RELEASE 14.8.2003 AT 10.30 AM

Componenta to merge operations of Alvesta and Karkkila foundries –
decision on location of new unit during September-October

Componenta is merging the operations of two of the group’s present
foundries. This will form a large, competitive foundry to serve
customers especially in northern Europe. The foundry will be located
in either Alvesta, Sweden or Karkkila, Finland. It is hoped to
complete the studies needed for making the decision about the
location in the next few weeks. The merger will take place in the
summer of 2004.

The automated foundries in Alvesta and Karkkila are almost the same
size in terms of net sales and personnel. Componenta Alvesta had net
sales in 2002 of EUR 12.1 million and some 120 employees. Componenta
Karkkila’s net sales last year totalled EUR 14.1 million and the
unit employs about 130 people. The production units had a combined
output in 2002 of 18,100 tonnes. In the past few years capacity
utilization at both foundries has been low and in consequence their
results have been unsatisfactory.

In the merger the entire production of both foundries will be
transferred to a single foundry. The new foundry will have annual
net sales of EUR 26 million and will employ 180 – 200 people.

Merging these operations will have a major impact on the entire
group. Bringing together the machinery, equipment and expertise of
these two foundries will eliminate the existing surplus production
capacity and create a competitive unit that operates with better
capacity usage. This restructuring, which is in line with the
corporate strategy, will have a positive impact on the financial
performance of the entire group. It has been calculated that it will
improve the result by EUR 3.5 – 5.5 million annually as from 2005.

Starting up the new foundry will require investments of EUR 6 – 8
million, depending on the location. The costs for running down the
foundry that is to be closed are estimated at EUR 2 – 3 million and
write-downs in this connection will be some EUR 3 – 4 million.

The company aims to complete the studies required to decide on the
location of the new foundry during September or October, after which
the required personnel negotiations can be started.

Helsinki, 14 August 2003

COMPONENTA CORPORATION

Heikki Lehtonen
President and CEO


FURTHER INFORMATION


Heikki Lehtonen              Lauri Huhtala
President and CEO            Director, Foundries
Tel. +358 9 225 021          Tel. +358 50 581 0223