STOCK EXCHANGE RELEASE January 31, 2008 at 12.45 p.m. In line with Outokumpu's new strategy phase, announced in September 2007, to increase the share of direct end-user and project sales and to expand the value-added special stainless steel products capacity, the Board of Directors has today approved a major investment to start the production of high-quality ultra-clean ferritic stainless steel grades, as well as bright annealed austenitic and ferritic stainless steel products in Tornio, Finland. The total investment is some EUR 370 million, including also a service center in Southern Germany. The investment project in Tornio also comprises some upgrades in the melt shop and finishing lines. The return on the investment is well above the Group target of 13%. VOD (Vacuum Oxygen Decarburization) equipment will be installed in the Tornio melt shop to enable the production of high-quality ultra-clean ferritic stainless steel with very low carbon, nitrogen and hydrogen content, for the most demanding end-use applications, within the current capacity frame. High purity ferritics are mainly used e.g. in automotive and chemical industries, as well as in building and construction. A new bright annealing and cold rolling line will be installed at Tornio Works. The new line will enable Tornio to start the production of both austenitic and ferritic bright annealed products, with an annual capacity of some 100 000 tons. The bright annealed finish stands for a mirror-like shiny stainless steel surface, and the products are typically used in applications like domestic appliances and food processing. The investment, together with the on-going replacement of the no. 2 annealing and pickling line, will increase the total finished products installed capacity of Tornio Works from the current 1.2 million tons to some 1.3 million tons by the end of 2010. The production capacity of ferritic grades will be some 230 000 tons annually. After these investment Outokumpu has the capability of producing all major stainless steel grades. To serve stainless steel customers in Southern Germany and especially the bright annealed austenitic and ferritic stainless steel customers around Stuttgart Outokumpu has decided to set up a new service center near Stuttgart. The service center will provide just-on-time deliveries with standard grades and bright annealed stainless steel that is processed to the needs required by the customer. The annual processing capacity of the service center will be some 60 000 tons and it will be in place by the end of 2010. For further information, please contact: Antti Pihko, Senior Vice President - Tornio Works, tel. +358 40 848 2948 Eero Mustala, Vice President - Project Communications, tel. +358 40 504 5146 Outokumpu Oyj Corporate Management Ingela Ulfves VP - Investor Relations and Financial Communications Tel. +358 40 515 1531
Outokumpu steps up ferritic and brigth annealed stainless steel capability - Over EUR 300 million to be invested in Tornio
| Source: Outokumpu Oyj