Outokumpu Heatcraft to start heat transfer coil manufacturing in China

Outokumpu Heatcraft's new heat transfer coil manufacturing plant was inaugurated today in HuangPu town, Zhongshan city, Guangdong province, China. This new investment totals USD 3 million. Depending on the product mix, annual sales are expected to be e betweensome USD 10-15 million USD. Manufacture of heat transfer coils is a new growing field for Outokumpu in China, customers being OEM and replacement coil manufacturers in China and the neighboring countries.

The HuangPu heat transfer coil plant, named Outokumpu Heatcraft Heat Exchanger (Zhongshan) Ltd., is a subsidiary of the joint venture Outokumpu Heatcraft, the joint venturebetween between Outokumpu Copper and Lennox International.. The production technology and a major part of the machinery are supplied by Outokumpu Heatcraft's Grenada operations. The heat transfer coil plant will initially employ some 50 persons and the number of employees is expected to grow to some 100 by the end 2004.

"We are now starting a new business, the manufacture of heat transfer coils where synergies of our tube operations can be fully utilized. The operations of Outokumpu Heatcraft Heat Exchanger has been built here in order to supply the heating, air-conditioning and refrigeration market with the best coils, in which we can find the combination of the Chinese skilful and industrious craftsmanship and the Finnish state-of-the-art copper tube", said Dr. Kalevi Nikkilä, Executive Vice President - Copper of Outokumpu. China is the largest market for air-conditioning equipment in the world, and 40% of the industry is based in the Guangdong province. Market growth in China is expected to continue and Outokumpu's position will further strengthen with this new offering.

Outokumpu Heatcraft joint venture was established in 2002. Its other heat transfer coil plants are located in the US, Mexico, France, Italy, and Czech Republic and it employs some 2 000 people.

Outokumpu Copper operates globally. It has a strong competitive position on its traditional markets in the US and Europe. In recent years investments to South-East Asia and China have made it a significant supplier of copper products for the globally operating as well as the local customers. Main customer groups are in the heat transfer, electrical, electronics, and telecommunications industries as well as in the building & construction and automotive industries. In addition to China, the manufacturing units are located in the US, Finland, Sweden, The Netherlands, Spain, Italy, Malaysia, Thailand, Austria and Britain. Net sales of Outokumpu Copper in 2002 were EUR 1 472 million and today it employs some 7 500 people.

For further information, please contact:

Hannu Wahlroos, Senior Vice President & General Manager, Appliance Heat Exchangers & Asia,
mobile phone +86 1390 259 2484

Martin Degerth, President of Outokumpu Heatcraft Global Operations,
mobile phone +1901 921 7703

OUTOKUMPU COPPER
Mirja Lavisto, Manager - Business Communications,
mobile phone +358 40 506 6954