RAUTE TO HAVE AN EUR 15 MILLION ORDER TO CHINA
RAUTE CORPORATION STOCK EXCHANGE RELEASE 27 DECEMBER 2010 at 9:00 a.m.
RAUTE TO HAVE AN EUR 15 MILLION ORDER TO CHINA
The contracts between Raute Corporation and Muling Kemian Wood Products Co., Ltd., which were announced on 3 November 2010, have taken effect. The machinery and equipment worth about EUR 15 million will be delivered to an LVL plant to be built in Muling, China during summer 2011. The plant will be commissioned in the beginning of 2012. In addition to Raute’s technological know-how and reference deliveries, the Shanghai unit’s delivery capability as well as local service and after-care ability in China were factors in closing the deal.
Muling Kemian Wood Products Co., Ltd. is a subsidiary of the Chinese public company Dalian Kemian Wood Products Co., Ltd., which is a new operator in the LVL industry. The machinery and equipment ordered by the company will be delivered to a new LVL production plant in Muling. The machinery and equipment to be delivered by Raute will have an annual rated capacity of approximately 60,000 m3 LVL.
China is by far the world’s largest producer of plywood. However, the production is almost entirely very labor intensive and based on small investments only. Structural LVL is for the present not produced in China. The plant to be built will be the first in China to produce structural LVL that meets international quality specifications. The Chinese LVL markets are forecasted to grow strongly due to the increasing awareness of earthquake resistance needs related to both infrastructure and housing construction. Also, the environmental aspects of LVL increase its value compared to steel construction of industrial premises.
The machinery and equipment will be manufactured at Raute’s main production unit in Nastola, Finland, and at the Shanghai unit.
Raute’s production unit in Shanghai was established in 2006, and expanded in 2007 and 2010. The unit has a floor space of 3,800 m2, and it employed some 50 people at the end of September. The unit focuses on engineering that supports local parts manufacture and on assembly and testing of subassemblies. The new order is the largest machinery and equipment delivery from Raute’s production unit in Shanghai to date, and the first project with complete assemblies sold directly by Raute’s local subsidiary Raute (Shanghai) Machinery Co., Ltd.
The new contract will not have an impact on Raute’s net sales and financial performance forecasts for 2010. Net sales for this year will increase and the operating profit will be positive.
RAUTE CORPORATION
Tapani Kiiski
President and CEO
FURTHER INFORMATION:Mr. Tapani Kiiski, President and CEO, Raute Corporation, tel. +358 3 829 3560, mobile +358 400 814 148
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd, main media, www.raute.com
RAUTE IN BRIEF:
Raute is a technology company serving the wood products industry worldwide. Its most important customers are the plywood and LVL industries. Raute is one of the world’s leading suppliers of mill-scale projects to these customer industries. The total service concept also includes technology services, with which Raute supports its customers throughout the entire life cycle of their investments. Raute’s head office is located in Nastola, Finland. Its other production plants are in the Vancouver area of Canada, in the Shanghai area of China, and in Kajaani, Finland. Raute’s net sales declined significantly due to the difficult market situation in 2009 and equaled EUR 36.6 million. The number of personnel at the end of 2009 was 524. More information on the company can be found at: www.raute.com.