STOCK EXCHANGE RELEASE
September 19, 2008 at 12.00 pm
Today Outokumpu announced its intention to close its thin strip
business at Meadowhall in Sheffield in the UK. The market for
stainless precision strip is over-supplied and this business in
Sheffield has been loss-making for several years. The proposal is
part of Outokumpu's performance improvement actions to ensure global
competitiveness.
The proposed closure would result in some 230 job losses at the
Meadowhall site. Pending of the consultation process, the closure of
the Sheffield Thin Strip business is expected to take place in the
first quarter of 2009.
The closure of operations is estimated to result in EUR 16 million
reduction in annual fixed costs from the second quarter 2009 onwards.
Write-downs and provisions of EUR 65 million, of which EUR 28 million
is cash. This would be recorded in the third quarter of 2008.
Bo Annvik, EVP Specialty Stainless, Outokumpu said: "Today's
difficult announcement is a result of a very thorough analysis. We
aim to continuously improve our competitiveness and despite the
commitment and excellent work in the Sheffield Thin Strip business,
we do not anticipate material improvement in the highly competitive
precision strip market. In the next coming weeks we will work closely
with union representatives to find solutions to support our personnel
in this process. "
The Meadowhall plant produces specialised, very thin forms of
stainless steel strip products. In 2007, its total stainless steel
deliveries were 12 000 tons. Outokumpu Kloster unit in Långshyttan,
Sweden produces similar products. The intention is to transfer most
of the business to Kloster, which enables Outokumpu to utilise
synergies and to deliver full benefits of Kloster's production
capacity.
Local consultation will start immediately with the workforce and the
appropriate trade unions to consider different alternatives to find a
suitable solution for all parties. Outokumpu will commence
discussions with customers to put in place possible alternative
supply routes in order to maintain the best possible customer
service.
For further information please contact:
Bo Annvik, EVP Specialty Stainless, +46 226 826 01
Roy Cooke, VP Sheffield Special Strip, +44 114 2616001,
mobile +44 (0) 780 224 7493
OUTOKUMPU OYJ
Corporate Management
Ingela Ulfves
Vice President - Investor Relations and Financial Communications
tel. + 358 9 421 2438, mobile +358 40 515 1531
e-mail: ingela.ulfves@outokumpu.com, www.outokumpu.com
