Metso initiates negotiations on personnel reductions in Fiber business line to improve competitiveness in changing business environment

Metso Corporation’s press release on September 30, 2009 at 3:00 p.m.

Metso has commenced personnel negotiations regarding the reduction of about 400 persons in their Fiber business line (FBL) operations in Sweden and Finland. Approximately 1,200 persons are employed in these operations.

FBL has initiated major changes in its operating model and organization structure to adjust operations to geographic shifts in the pulp and paper industry, and to decreased demand for capital equipment and for project sales. As part of this process, FBL’s five business units will be consolidated into two streamlined units (Fiber Processing Unit and Wood and Pulp Handling Unit) and Services, working alongside leaner and more efficient support functions.

The reductions are part of the process to streamline FBL’s operations and cost structure, to improve its competitiveness in a changing business environment. Additionally, the streamlining will improve operational flexibility and further strengthen FBL’s local operations, close to customers in growing markets.

The reductions will affect all personnel groups. Negotiations with unions have been commenced and are aimed to be concluded before the end of 2009.

Estimated reductions by location are:

Location:                  Estimated reduction:                  Current FBL:                                                                 Sundsvall, Sweden    168                                           575                                                                                        Pori, Finland             95                                             230                                                                                Karlstad, Sweden      94                                             219                                                                                 Hagfors, Sweden       26                                             130                                                                                Valkeakoski, Finland  17                                             45                                                                                 (including Jämsänkoski)                                                                                                                        Total                        400                                           1199

As a result of the restructuring, FBL’s annual costs are estimated to decrease by more than EUR 20 million. The cost reductions are estimated to be realized in full starting in 2011. One-off restructuring costs are estimated to be EUR 15 million, the majority of which are estimated to be booked during the 4th quarter of 2009.

Metso’s Fiber business line employs approximately 1,800 people globally. Its largest sites are located in Sundsvall and Karlstad in Sweden, and Pori in Finland. The line supplies chemical and mechanical pulp industry customers with machinery and equipment, as well as aftermarket and expert services.

Metso is a global supplier of sustainable technology and services for mining, construction, power generation, automation, recycling and the pulp and paper industries. We have about 28,000 employees in more than 50 countries.

For more information, please contact: Per-Åke Färnstrand, President, Fiber business line, tel. +46 70 633 39 46 Hannu Tähkänen, Senior Vice President, Fiber business line, tel. +358 40 551 79 47