Finnforest to start production of modular buildings in Finland

17.09.03

New factory to be located in Hartola, south-central Finland

Finnforest Corporation has decided that its new plant to produce wood-built
housing  modules will be located in Hartola, some 170 km north of Helsinki. 

To meet Finnforest's particular needs the town will establish a real estate
company  and arrange for the construction of a 20,000 square metre factory
building with space  for offices and social facilities. Production capacity
will gradually increase to about  1,000 houses a year. About 50-150 people will
be employed in the various stages, as  well as an equal number employed in
addition by the various local firms involved. Work on the site should begin
already this year and production will start up in autumn  2004. 

Finnforest's Scandinavian subsidiary, Moelven, has 30 years of experience of
modular  building in Scandinavia, where it is the leading supplier in the
field. Through its in vestment Finnforest continues to develop its overall
strategy and strengthen its position as a supplier of wood-based building
products and systems. 

The company has recently increased its efforts in research and development
work, as  could be seen, for example, in the Kurunhelmi house at the
Leisure-time Home Exhibition in Kuru. In the Finnforest Modular Office
architectural competition, too, Finnforest was looking for new wood-based
concepts and applications for use in office buildings. 

Construction of a new office block based on the winning Modular Office design
will start in summer 2004. At the same time in 2004 Finnforest will also 
present its modular house products, as well as building applications based on
the company's other products, at the Holiday Home exhibition in Hartola. 

Finnforest announced last spring that it would start modular building
production in  Finland within the current year. The main alternatives
considered for the plant site  were the municipal areas of Lappeenranta and
Hartola. 

Finnforest will rent its new factory building from the Hartola municipality on
a longterm lease. In the same connection the municipality will buy Finnforest's
Kuningaspalkki factory property and land area and lease them back to Finnforest
for  the company's own use. The new factory will be right next to Finnforest's
Kuningas- palkki glulam factory so there will be numerous ways to benefit from
synergy. 

Modular building production will make use of Kuningaspalkki products and
knowhow, such as gluelam beams and their applications. Benefits will also be
obtained  from sharing resources with regard to personnel, energy production,
maintenance and  use of storage space. 

Hartola itself is conveniently located to serve the growing population centres
of  Finland from the logistics point of view. Finnforest also looks forward to
cooperating  with the Hartola local authority in the recruitment and training
of employees and the  provision of rented accommodation. 

Finnforest's new Hartola factory will open wide perspectives for the company to
expand its modular building business further in the European markets. 

Further information from Finnforest:
Heikki Pietiläinen, Director, Modular Houses, phone +358 (0) 50 381 9369
Heikki Castrén, Senior Vice President, Engineered Wood Division, phone +358 (0)
50 598 7270 
Ari Martonen, President and CEO, phone +358 (0) 50 2406
Markko Ihamuotila, Senior Vice president, Corporate Marketing and 
Communications, phone +358 (0) 50 598 7014
 
Finnforest is Europe's biggest mechanical forest industry corporation.
Finnforest Corporation's two  industrial divisions are Solid Wood, which
produces sawn timber products, and Engineered Wood,  which manufactures
further-processed wood products. Finnforest supplies wood-based products,
services and total solutions to customers in building construction and industry
as well as to merchants,  wholesalers and retailers. Finnforest operates in
over 20 countries and employs 7,700 people. Its  Norwegian subsidiary, Moelven,
takes care of operations in Scandinavia. Moelven's activities are  organised in
two industrial business areas: Moelven Timber Group, including sawn timber,
laminated  timber and processed wood products, and Moelven Building Group,
comprising modular buildings and  modular system interiors. 

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