Neomarkka - Company Announcement

AVILON SHUTS DOWN TEMPORARILY

NEO INDUSTRIAL PLC       STOCK EXCHANGE RELEASE    12 July, 2011 at 2.25 pm


AVILON SHUTS DOWN TEMPORARILY

Avilon Ltd, part of Neo Industrial's Viscose Fibers business, is temporarily
shutting down production in its Valkeakoski-based factory. The shutdown is due
to viscose fiber's globally poor market situation. 

Viscose fiber market's weakening that started late spring is not only normal
seasonal fluctuation, but also consequence of overheating. The market suffers
from a surplus, and stock levels are high especially on the largest market,
China, while factory utilization is low. Due to the surplus, the price of fiber
has sunk nearly 30 percent in two months. 

- It is difficult to estimate when the standard fiber market will make a turn
to positive. We have better visibility with fire retardant fiber, but the
market is also sluggish. According to its strategy, Avilon has however reached
its previous, good market position in the United States fire retardant fiber
market, which is important in the long-term, reminds Neo Industrial's Managing
Director Markku Rentto. 

Commercializing of the pulp converting technology that Avilon has developed is
also proceeding according to plan. 

Avilon will now postpone the startup of a second main production line, planned
for August, but continues to prepare for it. 

During the shutdown, Avilon will generate revenues from its current stock,
including both standard and fire retardant fiber. The shutdown will not
compromise the delivery accuracy of fire retardant fiber. Avilon maintains its
good service availability with a fire retardant fiber stock estimated to last
through the third quarter. 

Due to the shutdown, Avilon has today given its entire staff notice of
temporary layoffs of less than 90 days. There will be no redundancies. 


Neo Industrial Plc

Markku E. Rentto
Managing Director


FURTHER INFORMATION:
Markku E. Rentto, Managing Director, Neo Industrial, tel. +358 20 720 9191
Claus Carlsen, Director, Avilon, tel. +358 20 780 0502

www.neoindustrial.fi

Neo Industrial Plc's strategy is to invest mainly in industrial companies with
similar synergic benefits. The aim of investments is with active ownership to
develop the purchased companies and establish additional value. Returns are
sought through both dividend flow and an increase in value. Neo Industrial's B
shares are listed on the NASDAQ OMX Helsinki Stock Exchange. 

Neo Industrial's business segments are Cable (Reka Cables, Expokabel, Nestor
Cables), Viscose Fibers (Avilon) and Single Family Housing (Finndomo).