Metso extends Valmet-Xian jv, increases ownership to 75 percent

JYVASKYLA, Finland, April 01, 2008 (Press Release) - Metso has concluded an agreement to increase its ownership in the Chinese joint venture company Valmet-Xian Paper Machinery Co. Ltd. from 48.3% to 75% by acquiring all the shares owned by Finnfund, and part of the shares owned by the other joint venture partner, China National Building Material Company Group. The agreement is subject to regulatory approvals and expected to be passed by year-end. As part of the arrangement, the joint venture acquires ownership of the real estate it currently operates at.

With this arrangement Metso extends and further strengthens its position as the leading supplier of machinery and technology to the Chinese pulp and paper industry.

The Valmet-Xian joint venture was established in 1989 with the original agreement spanning to the end of 2008. To date it has supplied more than 100 medium-size paper and board machines to the Chinese market, as well as certain machine structures for Metso's deliveries of medium-size and large machines to China and other countries. The joint venture employs 1,060 people. After the acquisition, Metso's total headcount in China will be 2,670.

Metso has been systematically strengthening its presence in the Chinese paper and board machinery market, currently the world's fastest growing. The total amount of Metso's 2006-2008 investments in China are about Euro 100 million, a large majority of which relates to the paper and board machinery segment.

Finnfund is a Finnish development finance company that provides long-term risk capital for profitable projects in developing countries and transition economies outside the EU.

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