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Finnforest and Russian LVL-Ugra to co-operate

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03/05/2004


Co-operation to meet growing demand for Kerto products

Finnforest Corporation has signed a strategic agreement on co-operation with
the Russian producer of LVL products LVL-Ugra. Within the co-operation
Finnforest will be responsible for starting up LVL-Ugra's production
operations, quality control and creating a quality system. Finnforest will have
exclusive rights to sales and marketing of the products outside Russia and the
CIS countries. The agreement guarantees Finnforest the necessary additional
capacity to meet the growing demand for Kerto products among their customers. 

Co-operation with LVL-Ugra supports Finnforest's strategy to be the European
market leader for wood products solutions, and promotes the company's expansion
into Russia. At present Finnforest has a planing mill in St. Petersburg. 

The LVL-Ugra company located in Khanty-Mansiysk Autonomous Region, Western
Siberia, is owned by a holding company founded by the region's administration.
The company focuses on developing the wood products industry in the region. The
first batch of Kerto products is to be launched on the market this summer. The
mill's annual production capacity is about 40,000 cubic metres. 

Finnforest is the only European company to manufacture LVL, with factories in
Lohja and Punkaharju, in southern Finland. The Lohja plant has a capacity of
100,000 cubic metres and Punkaharju produces 60,000 cubic metres annually. 

Kerto (LVL, Laminated Veneer Lumber) is made by gluing together 3.2 mm-thick
layers of softwood veneer. Kerto is used in bearing structures, for example,
intermediate floor and roof structures and in I-joists. 

For further information, please contact: 
Ari Tiukkanen, Director, Building Products Business Unit, 
mobile +358 50 598 7293
Heikki Castrén, Senior Vice President, Engineered Wood Division, 
mobile +358 50 598 7270
Markko Ihamuotila, Senior Vice President, Corporate Communications and
Marketing, 
mobile +358 50 598 7014

Finnforest Corporation is the biggest wood products industry corporation in
Europe. It employs 8,000 people and is one of the core businesses of Finland's
Metsäliitto Group. Finnforest Corporation has two industrial divisions:
sawmilling activities are grouped in the Solid Wood Division, and processed
wood products operations in the Engineered Wood Division. Finnforest's Sales
and Distribution Division serves over 20 countries. Finnforest's Norwegian
subsidiary, Moelven Industrier ASA, takes care of operations in Norway, Sweden
and Denmark. Finnforest supplies wood materials and wood-based products and
services to customers in the building, industrial, and resale and distribution
sectors.

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