Rautaruukki to modernise blast furnaces at its Raahe Works and to restart idle blast furnace

Rautaruukki Corporation  Stock exchange release  23 April 2009 at 12:00  

Rautaruukki to modernise blast furnaces at its Raahe Works and to restart idle
blast furnace 

Rautaruukki has decided to modernise the two blast furnaces at its Raahe Works
in Finland during 2010 and 2011. In the same context, the company will also
make environmental investments to significantly reduce adverse environmental
impacts and energy consumption at the works. The company has also decided to
restart blast furnace 1, which was shut down in December 2008, to prepare for
the disruption to production due to downtime whilst refurbishment is being
carried out and to safeguard uninterrupted customer deliveries. 

It is planned to bring modernisation of blast furnace 1 at the Raahe Works
forward by three months so that work begins in April 2010. Rautaruukki plans to
overhaul blast furnace 2 during 2011, although bringing the modernisation of
blast furnace 1 forward would also allow the overhaul of blast furnace 2 to
take place already in 2010. Any decision to bring forward the blast furnace 2
project will be made separately. Both blast furnaces will be shut down in turn
for around two months during the modernisation project. 

In connection with the project, Rautaruukki will switch over to using only iron
pellets instead of sinter as a raw material in the iron-making process. Because
of this change, pellet conveyor systems, receiving hoppers and a briquetting
plant will be built at the works. The sinter plant in current use will be
closed down by the end of 2011. 

During the modernisation project, environmental technology at the works will be
improved by, among other things, deploying more efficient filter systems and by
converting the hot water systems to cold water ones. Closure of the sinter
plant and the environmental investments to be carried out will significantly
reduce dust, sulphur dioxide and carbon dioxide emissions, and cut energy
consumption at the works. 

Domestic purchases account for major share

Investments in modernising the blast furnaces and changing the feedstock base
total around EUR 220 million. Environmental investments of some EUR 60 million
will be made in addition to this. 
 
“These investments will enable us to safeguard the continuity of our steel
production far into the future. The investments will also have a major regional
impact on employment, since the domestic purchases will account for almost 80
per cent of the total investments. Domestic purchases include design and
project management, structural work, equipment purchases, workshop fabrication
and installation work totalling around EUR 220 million,” says Rautaruukki
Corporation's President & CEO Sakari Tamminen. 

Some EUR 55 million of the investments are scheduled for 2009, around EUR 107
million for 2010, EUR 109 million for 2011 and the remaining approximately EUR
10 million for 2012. The EUR 55 million investment costs scheduled for the
current year are included in the estimated capital expenditure of around EUR
170 million announced for 2009. 

Blast furnace 1 at the Raahe Works came on stream in 1964 and was last
overhauled in 1995. Blast furnace 2 came on stream in 1975 and was last
overhauled in 1996. 


Restart of blast furnace currently idle

Rautaruukki will prepare for the disruption in production due to downtime
whilst modernisation is being carried out by restarting blast furnace 1, which
has been idle since early December 2008. 

“The upcoming blast furnace modernisation and plans to bring it forward call
for reserve stocks to be built up to safeguard deliveries. Furthermore,
restarting the blast furnace is justified from the slab stock management point
of view so that we can ensure customer deliveries in the near future,” says
Olavi Huhtala, President, Ruukki Metals. 

Work on restarting blast furnace 1 will begin immediately. The blast furnace
will reach its target production speed in about four weeks. 

For further information, please contact:
Olavi Huhtala, President, Ruukki Metals, tel. +358 20 59 29157
Sakari Kallo, SVP, Production, Ruukki Metals, tel. +358 20 59 28888 


Invitation to a press conference

The company will hold a press conference, in Finnish, about restarting the
blast furnace and the investments to be made at the Raahe Works on Thursday 24
April starting at 1.30 pm at Rautaruukki's Raahe Works, Rautaruukintie 155.
Sakari Kallo, Senior Vice President, Production, Ruukki Metals and Kari Ojala,
Vice President, Hot-Rolled Plate and Strip Products, will be present at the
event. 

For further information about the press conference, please contact: Sari Idman,
Communications Manager, Ruukki Metals, tel. +358 50 31 43165 


Rautaruukki Corporation
 
Anne Pirilä
SVP, Corporate Communications and Investor Relations
 
Rautaruukki supplies metal-based components, systems and integrated systems to
the construction and engineering industries. The company has a wide selection
of metal products and services. Rautaruukki has operations in 26 countries and
employs 14,300 people. Net sales in 2008 totalled EUR 3.9 billion. The
company's share is quoted on NASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS). The
Corporation uses the marketing name Ruukki. 
 
 
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