ROTTNEROS STARTS NEGOTIATIONS FOR CLOSURE OF ROCKHAMMAR TIMBER

The Rottneros Group’s Board of Directors has decided to instruct the Group’s CEO to start negotiations with the trade unions concerned for the closure of Rockhammar Timber sawmill. Negotiations will be started immediately. In total, 31 employees will be affected by the decision.

The decision is due to the fact that Rockhammar Timber has been operating at a loss for a number of years. A number of measures have been taken with the aim of improving profitability. The range has been reoriented to suit the market better and SEK 25 million has been invested in the sawmill and in staff training. In addition, the workforce has been reduced. Despite these measures, the business has not become profitable.

In view of the assessment by the Group management that profitability cannot be achieved in the foreseeable future and that the sawmill does not form part of Rottneros’ core business, in spring 2004 attempts to find an external buyer for Rockhammar Timber which would be better placed to continue the business were intensified. These attempts have not been successful.

“Regrettably, since we have not been able to achieve profitability or to find a buyer we will be starting codetermination negotiations for the closure of Rockhammar Timber sawmill,” says Lars Blecko, President and CEO of Rottneros.

Further information: Lars Blecko, President and CEO, +46 (0)70-6414910

Upplands Väsby, Sweden, 16 August 2004

ROTTNEROS AB (Publ.)

Rottneros is one of the world’s leading independent manufacturers of market pulp. The Group consists of the parent company, Rottneros AB, which is listed on the Stockholm Stock Exchange, along with its subsidiaries of Rottneros Rockhammar AB, Utansjö Bruk AB and Vallviks Bruk in Sweden as well as Rottneros Miranda, S.A. in Spain, with activities involving production and sales of market pulp, Rockhammar Timber AB, which produces and sells sawn timber, plus the raw materials purchasing company of Rottneros Baltic SIA in Latvia. The Group has a total of 857 employees and a turnover of approximately SEK 2.4 billion.