Outokumpu Stainless Tubular Products streamlines production to improve competitiveness

Outokumpu has decided to carry out a number of production line transfers and an investment in its stainless steel tubular business unit OSTP in Sweden. OSTP has several production units in Sweden, representing some 40% of OSTP's total tube production capacity. The purpose of the transfers and the investment is to concentrate the production of similar types of tubes into one location and thereby improve efficiency.

OSTP's Nyby unit will invest in a second LAP line (Laser-Annealing-Pickling), which is a state-of-the-art integrated production line for welded stainless process tubes. The total investment is some
EUR 8 million, and production is scheduled to start in the third quarter of 2008. The two heat exchange tube production lines in the Fagersta unit will be transferred to Nyby during 2007. Furthermore, the large diameter tube production line will be transferred from Nyby to Storfors during 2008.

The Fagersta unit is scheduled to be closed in mid 2007. As to the remaining hygienic tube production line in Fagersta, options are still being considered.

These actions will increase the annual production capacity of the Nyby unit by some 50% to 30 000 tonnes, and improve logistics and efficiency in OSTP Sweden, making the business more competitive. OSTP's total production capacity will slightly increase as a result of these actions.

For further information, please contact:

Lars Johansson, SVP - Outokumpu Stainless Tubular Products,
tel. +46 226 82602, mobile +46 70 618 2602

Eero Mustala, SVP - Corporate Communications, Outokumpu Oyj,
tel. +358 9 421 2435, mobile +358 40 504 5146

OSTP is one of the world's largest producers of welded stainless steel tubular products, with operations in Sweden, Finland, Estonia, Belgium, France, Canada and the US. The annual production capacity is some 100 000 tonnes. The business unit has 1 300 employees and had sales of some EUR 400 million in 2005.

OSTP is part of the international stainless steel company Outokumpu. Outokumpu operates in some 30 countries and employs nearly 9 000 people. The level of annual sales of the Group is some six billion euro.