Outokumpu to invest in customer service and special products

Growth and increasing the share of special grades are embedded in Outokumpu's strategy. In line with the strategy and Outokumpu's Year of Commercial initiatives the Board of Directors has today approved two investments. A new Service Center will be established in Poland to take advantage of the fast growing Eastern European stainless steel market and the investment in Thin Strip Nyby will shift the plant's product mix towards more value added special grades. Both of the now approved investments are within the earlier communicated capex frame of EUR 175 million for 2007.

New stainless steel Service Center to be set up in Poland

To service the growing Eastern European market Outokumpu has decided to set up a new stainless steel Service Center in Southern Poland near Katowice. The operation will be a combination of a Coil Service Center with slitting and cut-to-length lines, together with a Plate Service Center with plasma and water jet cutting. The selected site near Katowice is connected to the region with optimal road and rail connection. The Service Center will serve Poland and other countries in the region like Czech Republic, Slovakia and Hungary and will challenge new potential markets in Eastern Europe. The total investment is some EUR 20 million and the Service Center is scheduled to be operational by the end of 2008.

Says Jan Myczkowski, General Manager - Outokumpu Poland: "Outokumpu has a long-standing presence in Poland and in the region and has until now served the market through sales companies. Now the setting up of the new Service Center will enable us to take advantage of the growing market, both related to the volume and added value products. The state-of-the-art facility will enable us to execute the company vision - to be the undisputed number one in stainless - in Eastern Europe, as well."

Increasing stainless steel special grades capacity in Nyby, Sweden

The other investment is for surface grinding and automatic storage and retrieval equipment in the Thin Strip Nyby works in Sweden. The equipment will be housed in a new building, and will expand Nyby's share of special grades sales at the expense of standard grade products. The EUR 27 million investment will allow the plant to double its stainless steel special grades capacity of cold rolled products from 34 000 to 64 000 tons annually, to take advantage of the fast growing special grades market. The full capacity will be released by the end of 2008. Following this, a further investment is planned to add finishing annealing equipment to bring the total special grades capacity of Thin Strip Nyby to 70 000 tons annually by mid 2010.

Says Jamie Allan, Senior Vice President - Thin Strip: "This investment allows Thin Strip Nyby to focus on the fast growing special grades market and at the same time remove the overlap with Outokumpu's Tornio Works in standard grade products. The investment aligns with the Group strategy of growth in special grades and direct sales to end-users."

Further information:

Jan Myczkowski, General Manager - Outokumpu Sp. z o.o.
Mobile +48 602 725 766, e-mail jan.myczkowski@outokumpu.com

Jamie Allan, Senior Vice President - Thin Strip Business Unit,
Mobile +46 70 674 9210, e-mail jamie.allan@outokumpu.com

Eero Mustala, Senior Vice President - Corporate Communications,
Mobile +358 40 504 5146, email eero.mustala@outokumpu.com