Rautaruukki adjusts steel production and contin...

Rautaruukki Corporation Stock exchange release 1 December 2008 at
9:00

Rautaruukki is to adjust steel production and other operations in
line with weakened demand and stock levels. Due to the weakened
market situation, Rautaruukki now expects comparable consolidated net
sales for the current year to be slightly higher than in 2007 and
operating profit, excluding non-recurring items, to be at the same
level as in 2007. The company earlier expected comparable
consolidated net sales would remain somewhat below the 10 per cent
growth target and operating profit would be higher than in 2007.
Rautaruukki is continuing actions to further improve operational and
cost efficiency under the Boost programme, launched in October this
year.


In the context of adjustment and efficiency measures, the company is
to start employer-employee negotiations about possible lay-offs,
redundancies and part-time working in different market areas. The
number of lay-offs will become clear as these negotiations proceed.
In addition, there will also be a reduction in the use of temporary
and agency workers.

Actions to improve efficiency aim at permanent cost savings of around
EUR 60 million at an annual level. In Finland, it is estimated
efficiency measures will involve the loss of a maximum of 520 jobs,
most of which relate to improving efficiency within the steel
business and steel service centres. Corporate-wide, the company
estimates it needs to reduce around 1,000 jobs. Where possible,
retirement arrangements will also be used and the possibility of
staff relocation is also being studied. These actions are expected to
result in non-recurring costs of around EUR 10 million, which will be
recognised in the last quarter of 2008.

President & CEO Sakari Tamminen:
"We consider that our chosen focus areas of business still have
strong growth potential. However, the global credit crunch has
weakened demand in Ruukki's customer industries over the past few
weeks. We are reacting to this by adjusting our own operations
accordingly. Although our people are working hard to meet our
targets, the difficult market situation calls for adjustment measures
in different market areas. In addition, we are continuing to make
structural changes as planned under the operational excellence
programme, Boost, to ensure the company's long-term competitive edge
and profitability. This is how we are also creating a permanent
platform to be able to improve our market positions so that we are on
form when the recession eases and the economy once again returns to
an upswing."

Production to be adjusted to market situation

To adjust steel production, one of the two blast furnaces at the
Raahe Works in Finland will be shut down temporarily. Output at
Ruukki Production's other units in Finland will also be scaled back
accordingly. Also Ruukki Metals will cut back production at steel
service centres. Ruukki Construction will adjust production and sales
operations in different market areas, mostly outside Finland. Ruukki
Engineering will adjust production at the Mo i Rana unit in Norway
and at the Kurikka plants in Finland in line with demand.

Progress made with corporate-wide operational efficiency programme,
Boost

The divisions and business support functions continue to implement
actions under the Boost programme launched in October this year.
Among other things, the programme seeks to optimise the production
network by focusing operations on increasingly larger, more
competitive units and to improve supply chain management and
sourcing. In addition, the efficiency of business support functions
supporting the company's operative business will be improved, the use
of outside specialists reduced and the company's investments will be
rescheduled.

The following projects are now being started under the Boost
programme:

Ruukki Construction is to continue to further improve production
efficiency by centralising construction product manufacture in the
Baltic states on the Pärnu plant in Estonia. The small profiling
units in Riga, Latvia and in Vilnius, Lithuania will be closed by the
end of April 2009. Local sales offices in Latvia and Lithuania will
continue to operate. In addition, production and supply chain
efficiency will be improved across the division.

Ruukki Engineering is planning to transfer production in Hungary from
the Hatvan site to the components plant in Jászberény during the
first quarter of 2009.

Ruukki Metals is planning to close the steel service centre in
Tampere, Finland by the end of June 2009 and to focus parts
processing on Raahe and Seinäjoki. The division's business and
production units and administration are improving operational
efficiency and removing overlapping functions.

In addition, Ruukki Production will improve production and cost
efficiency permanently across the division. This will be done mainly
by fewer shifts.

In addition, business support functions will also launch projects to
improve efficiency.

The impact on the personnel of all the efficiency and adjustment
measures above will become clear in each unit, country and operation,
once employer-employee negotiations have ended. Negotiations will
progress in accordance with the local legislation in each country
concerned.


For further information, please contact:
Sakari Tamminen, President & CEO, tel. [phone]
Mikko Hietanen, CFO, tel. [phone]

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 15,000 people. Net sales in
2007 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. www.ruukki.com


DISTRIBUTION:
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www.ruukki.com


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