Stock Exchange Release October 23, 2007 at 1.00 p.m. In line with Outokumpu's new strategy phase, announced on September 2007, to increase the share of direct end-user and project sales and to expand the value-added special products capacity, new investments worth a total of some EUR 240 million over the next five years have been decided. The investments comprise the expansion of the hot rolled plate (quarto plate) capacity in Sweden and the US, and expanding the service center offering in Germany. Consolidating leading market position in hot rolled stainless steel plate Outokumpu is the market leader in stainless steel quarto plate (individually rolled wide and thick plate) with a global market share of some 20%. The current production capacity of some 160 000 tons of mainly tailor made plate in special grades has been fully loaded the past few years. The growth of the overall quarto plate demand is estimated to be strong in the coming years driven by high investments into e.g. the energy sector, desalination and process industries in general. The share of the high-strength low-nickel duplex grades is estimated to grow faster than the overall market. To meet our customers future demand and the general growth in this highly attractive product range Outokumpu has decided to expand its production capacity and capability in Degerfors in Sweden and New Castle (IN) in the US by some 100 000 tons. Current equipment will be upgraded and new equipment installed to increase the capacities in Degerfors by some 80 000 tons to 190 000 tons and in New Castle by some 20 000 tons to 70 000 tons. The amount of investments will be some EUR 180 million and EUR 40 million, respectively. The investment will spread out to five years with the majority of cash out-flows in 2008 and 2009. The returns on the investments are well above the Group target of 13%. The new installed capacity is for the most part scheduled to be available in 2010. Outokumpu's quarto plate product mix will shift more and more to value-added tailor made plates and special grades, especially Outokumpu's proprietary lean duplex and other duplex grades. The corrosion resistant high strength duplex grades offer considerable material weight savings to customers and attractive opportunities to Outokumpu. Typical end-user and project customers are in segments like desalination, chemical tankers, oil & gas, pulp & paper, as well as in energy, chemical and petrochemical industry. Applications include e.g. pressure vessels and open tanks, heavy-walled pipes, bridge sections and process equipment. Expanding service center offering in Germany To improve and increase its service offering to end-user and project customers in Germany, the largest European stainless steel market, Outokumpu will expand the stock and processing capacity of its Willich service center in north-western Germany. With an investment of some EUR 20 million the annual stock and processing capacity in Willich will increase from the current 60 000 tons to some 110 000 tons by 2009. The investment comprises e.g. a new cut-to-length line and a new slitting line. For further information, please contact: Päivi Lindqvist, SVP - IR and Communications, Outokumpu Oyj, tel. +358 9 421 2432, mobile +358 40 708 5351 paivi.lindqvist@outokumpu.com Eero Mustala, Senior Vice President - Corporate Communications, Outokumpu Oyj, tel. +358 9 421 2435, mobile: +358 40 504 5146 eero.mustala@outokumpu.com OUTOKUMPU OYJ Corporate Management Ingela Ulfves Vice President - Investor Relations tel. + 358 9 421 2438, mobile +358 40 515 1531, fax +358 9 421 2125 e-mail: ingela.ulfves@outokumpu.com www.outokumpu.com
Outokumpu to make further EUR 240 million investment into stainless steel value-added special products and service centers
| Source: Outokumpu Oyj