STOCK EXCHANGE RELEASE
11 October 2011 at 2.00 pm EET
OSTP, the Outokumpu and Tubinoxia joint-venture for tubular products, began its
operations on 1 October 2011. The company's new board of directors has held its
first meeting and has confirmed OSTP's corporate strategy and plans to improve
the company's performance.
In OSTP's new strategy, the focus will be on process pipes and butt-weld
fittings, consolidating the company's production structure and reducing costs by
streamlining its organisation. OSTP will continue to offer customers a wide
range of products by complementing its own production with externally-sourced
products and grades.
OSTP's managing director Andrea Gatti: "I am confident we can build a bright
future for OSTP, but it will not be an easy journey. Tough decisions will be
required and unfortunately our personnel will also be affected. Everyone in the
management team is committed to ensuring that after the transition period, the
new OSTP will be stronger for our employees, our customers and our owners."
Production of process pipes are planned to be consolidated in Jakobstad in
Finland and Riyadh in Saudi Arabia while butt-weld fittings to the main part
would be produced in Jakobstad and Örnsköldsvik in Sweden according to the plan.
Continuation of production at these sites is based on ongoing performance, cost
position and the ability to handle additional production quantities.
The production of process pipes and heat exchanger tubes at OSTP's Nyby site in
Torshälla in Sweden is planned to be closed down by the end of this year. Some
of the production is planned to be transferred to Jakobstad as part of the
overall restructuring. OSTP will initiate negotiations with trade union
representatives in Nyby immediately and special emphasis will be given to
finding good solutions for the employees affected. Support for personnel may
include transfers to other locations or help in finding new jobs outside of
Outokumpu. Some 100 people are currently employed at the Nyby site. In addition
to streamlining the company's production operations, OSTP is also planning to
reduce other cost, such as overhead costs.
At OSTP's other operations, in which the focus is on threaded fittings, heavy
wall pipes and pressure vessels, work on improving short-term financial
performance will continue. These operations are located in Molkom, Storfors and
Örnsköldsvik in Sweden, Tallinn in Estonia, Brockville in Canada, and Tuusula in
Finland. OSTP plans to divest these businesses by the end of 2012 to release
capital and avoid the need for future investment.
The measures planned are expected to result in a visible turnaround in OSTP's
financial performance in 2012 and positive operating profit in 2013. In the
second quarter of 2011, EUR 65 million of impairments related to OSTP were
already booked. Depending on the outcome of the planned statutory negotiations,
there might be some marginal impact on Outokumpu's operating profit in the
fourth quarter of 2011.
For further information, please contact:
Andrea Gatti, managing director at OSTP, tel. +39 010 595 8177, mobile
+39 335 606 4896
Kalle Luoto, CFO at OSTP, tel. + 358 421 2433, mobile +358 40 552 9682
OUTOKUMPU OYJ
Outokumpu is a global leader in stainless steel with the vision to be the
undisputed number one. Customers in a wide range of industries use our stainless
steel and services worldwide. Being fully recyclable, maintenance-free, as well
as very strong and durable material, stainless steel is one of the key building
blocks for sustainable future. Outokumpu employs some 8 000 people in more than
30 countries. The Group's head office is located in Espoo, Finland. Outokumpu is
listed on the NASDAQ OMX Helsinki.
www.outokumpu.com
[HUG#1553827]
