Incap - Company Announcement

INCAP TO START MANUFACTURING OPERATIONS IN INDIA

INCAP CORPORATION   STOCK EXCHANGE RELEASE   31 May 2007 at 10.45
a.m.


Incap and TVS Electronics Limited, India, have signed an agreement on
the acquisition of TVS Electronics' contract manufacturing unit in
line with the Letter of Intent signed in February.

According to the agreement, TVS Electronics' contract manufacturing
unit in Tumkur and the related design services in Bangalore will be
transferred to Incap's subsidiary Incap Contract Manufacturing
Services Pvt. Ltd. on 1 June 2007. The business operations acquired
by Incap include the manufacturing services business as well as the
property and the factory building with its equipment in Tumkur. The
total value of the acquisition is about 400 million Indian rupees or
approximately EUR 7.4 million.

The contract manufacturing unit in Tumkur is located within easy
reach of Bangalore, approximately 80 kilometres away. There are about
230 employees working in the unit currently and, in addition to
electronics manufacturing and product integration, its services also
include materials procurement, distribution and logistics services as
well as maintenance. With a floor space of approximately 6,000 square
metres, the unit manufactures box-build products, such as power
supplies and medical electronics. The unit's customers are equipment
manufactures based in Europe and India.

Incap forecasts that its Indian operations will generate about EUR 8
- 10 million in revenue during June-December 2007. In order to
attract new customers, investments will be made in further modern
production capacity.

This acquisition is in line with Incap's strategy, which is geared
towards growth and internationalisation. Presence in the growing
markets of India and Asia will create new business potential. The
closeness of procurement sources in Asia will enable more global and
more effective purchasing of materials.

The electronics industry in India is estimated to grow strongly at an
annual rate of 25-30%, and outsourcing is expected to increase by 30%
annually. The customers targeted by Incap operate in industrial
electronics, medical equipment manufacturing and the
telecommunications sector.

Following this transaction, Incap's total number of personnel will
rise to 730, of whom 45% will be employed in the Finnish units. In
the future, the growth in the number of personnel is expected to take
place mainly in units abroad."Our service ability will improve because we can now offer our
globally operating customers even more competitive services", says
Juhani Hanninen, President and CEO of Incap Corporation. "The markets
in India are very promising especially for a company that flexibly
manufactures medium-sized series like us. Acquiring a business was a
suitable and quick way for us to establish operations in Asian
markets because now, to start with, we have a stable customer base
and well-functioning production operations in place."


INCAP CORPORATION

Juhani Hanninen
President and CEO

For additional information, contact:
Juhani Hanninen, President and CEO, tel. +358 50 556 7199
Anne Sointu, Chief Financial Officer, tel. +358 40 347 2059
Hannele Pöllä, Director, Communications and Investor Relations, tel.
+358 40 504 8296

DISTRIBUTION
Helsinki Stock Exchange
Principal media


INCAP IN BRIEF
Incap Corporation is a fast-growing electronics contract manufacturer
whose comprehensive service covers the entire product lifecycle from
design and manufacture to repair and maintenance services. The
company's main customer sectors are leading equipment suppliers in
telecommunications, electrical power technology, the automation and
process industries as well as measurement technology, safety
electronics and healthcare. The Incap Group's revenue in 2006
amounted to EUR 89 million and the company currently employs about
540 people. Incap's share is listed on the Helsinki Stock Exchange
and is a component of the Nordic Small Cap list within the
information technology sector. For additional information, please
visit www.incap.fi