Rautaruukki - Company Announcement

Rautaruukki adjusts steel production and continues actions to improve efficiency. The company expects 2008 operating profit to remain at 2007 level

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

Rautaruukki adjusts steel production and continues actions to improve           
efficiency. The company expects 2008 operating profit to remain at 2007 level   

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. +358 20 592 9075                         
Mikko Hietanen, CFO, tel.+358 20 592 9030                                       

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                                  
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