Ruukki Group Oyj - Company Announcement

RUUKKI GROUP CONTINUES IMPLEMENTING RUSSIAN STRATEGY, BUT INTERRUPTS KOSTROMA

RUUKKI GROUP CONTINUES IMPLEMENTING ITS RUSSIAN STRATEGY, BUT INTERRUPTS THE
PREPARATIONS IN THE KOSTROMA REGION RELATED TO SAWMILL AND PULP MILL
INVESTMENTS 

The administration of the Kostroma region has not supported Ruukki Group's      
priority investor status applications for sawmill and pulp mill.                
Ruukki Group Plc's (later referred also as “the Company”) Russian subsidiary has
received information from the Kostroma region of Russian Federation according to
which the priority investor status applications made by the Russian subsidiary  
for sawmill and pulp mill investments have not been supported by the Kostroma   
region. Last Tuesday the Kostroma region published in its web site an           
announcement where there was no reference or information related to the         
non-advocation of the Ruukki Group's pulp mill priority investor status         
application.                                                                    

Ruukki Group's strategic aim is to concentrate on wood processing within the    
Northern coniferous wood zone. Group business operations will be focused on     
mechanical wood processing, and furthermore on pulp business. The target is to  
reach revenue of over EUR one billion by the first half of the 2010 decade, and 
the Group EBIT percentage should be in excess of the average profitability      
within the same industry.                                                       

Besides the planned and partially implemented investments in the Kostroma       
region, Ruukki Group has investigated business and investment opportunities in  
the other areas in Russian Federation. These investigations and negotiations    
thereby will be continued and strengthened with a target of finalising an       
integrated industrial entity, whose scale is expected to be equal to that of the
Kostroma plans. Main focus of this work is within the European part of Russia   
bordered by the Ural mountain range. The Company will make separate             
announcements on these processes both in accordance with the progress of the    
projects as well as in conjunction with the Company's interim reports.          

Based on the decisions made by the Kostroma region there no longer are any      
prerequisites to continue with the planning of and carrying out of the          
investments. Ruukki Group has decided to abort all the preparations and         
implementation of the Kostroma investment projects. Furthermore, the Company has
decided to initiate legal assessment and related processes on the decisions and 
actions by the Kostroma Oblast and the negligences of its obligations. The      
primary target of Ruukki Group is to get compensation for damages based on the  
breach of agreements.                                                           

The views and requirements presented by the Kostroma region to change the       
content of the investment agreements signed on 23 May 2007 and registered on 17 
July 2007 are not in any way based on these agreements, and therefore, they are 
fully unfounded claims made afterwards for signed and confirmed agreements.     
Ruukki Group and its Russian subsidiary see that they have definitely made all  
the preparations for sawmill and pulp mill investments fully in accordance with 
the main aims and obligations of the signed investment agreements; especially   
taken into account that Kostroma region has not supported the priority investor 
status applications as set forth by the positive co-influencing obligations in  
the investment agreements. Therefore, the Company considers the actions and     
decision carried out by the administration of Kostroma region after the governor
change in autumn 2007 groundless.                                               

There are two main issues related to enticing forest industry investments into  
the Russian Federation: 1) investment agreement with the region, and 2) priority
investor status. With these two vehicles foreign investors are encouraged to    
develop Russian forest industry in accordance with the current Russian forest   
legislation.                                                                    

The priority investor status applications were filed on 9 November 2007 by      
Ruukki Group's Russian subsidiary. The rules and processes related to the       
priority investor status, which in turn is based on the new Russian forest code,
were given during the summer 2007. According to the Company's view, as assessed 
afterwards, the Kostroma region's administration has not been considering Ruukki
Group's priority investor status applications with serious interest, and        
therefore has not had the intent to confirm the other major precondition for    
implementing the investment projects.                                           

Ruukki Group Plc and its Russian subsidiary see that it is not possible that    
Ruukki Group would have been able to proceed according to the agreements, when  
the other prerequisite - priority investor status - has not been granted due to 
negligence by the administration of Kostroma region.                            

Despite the fact that the other main precondition was not existing Ruukki Group 
has been going on with the preparations for sawmill and pulp mill investments by
strict and goal-directed time schedule as set forth in the investment           
agreements. Conditions were still valid for the targeted timeframes to be       
reached so that the sawmill's start-up would have been at the end of 2008 and   
the start-up of the pulp mill at the end of 2010.                               

In this situation Ruukki Group is not any more going to continue active         
negotiations with Kostroma region's administration, and therefore the Company   
does not consider it possible with the current investment conditions for having 
the planned industrial integrate of the sawmill and the pulp mill to be situated
in Kostroma region.                                                             

The change of the Kostroma investment projects' status is not to have           
substantial impact on the financial forecast of Ruukki Group for the current    
year.                                                                           

“For Ruukki Group's growth strategy directed towards Russia the situation       
evolved now is regrettable. However, this does not prevent us from implementing 
the planned investment elsewhere - there seem to be many potential parties      
interested in receiving investments. According to our view, the policy          
definition by Kostroma region cannot be generalised to be the will of the       
Russian Federation. This settlement will, unfortunately, have effect on the     
development of international investments into Russia. It seems fully            
incomprehensible that first the Russian Federation announces its interest to    
have major forest industry investments into its territory, but after we have    
made official agreements based on that announcement the counterparty, as        
assessed afterwards, factually already after two months breaks away from the    
agreements.”, says Matti Vikkula, CEO of Ruukki Group Plc.                      

Ruukki Group Plc will organise two separate briefings on the issue on Monday 3  
March 2008 at 2:00 pm Finnish time and 3:00 pm Moscow time:                     

a conference call in English (from Ruukki Group Plc CEO Matti Vikkula and CFO   
Jukka Havia will be present); and                                               
a press conference in Moscow (with board member Ahti Vilppula will be present). 

All the attendees for the conference call are requested to register in advance  
by contacting Helena Tuominen, who will give further participation details, by  
email to helena.tuominen@ruukkigroup.fi or by telephone to +358 400 768 884.    

For the Moscow press conference, and to get more detailed information on the    
practical conference arrangements, please register by email to                  
tatiana.smirnova@hillandknowlton.com or by telephone to +7 495 4103412.         

RUUKKI GROUP PLC                                                                

MATTI VIKKULA                                                                   
CHIEF EXECUTIVE OFFICER                                                         

Ruukki Group's strategic aim is to concentrate on wood processing within the    
Northern coniferous wood zone. Group business operations will be focused on     
mechanical wood processing, and furthermore on pulp business. Ruukki Group Plc's
share is listed on Helsinki Stock Exchange. In the OMX Nordic Exchange the      
shares of the company are traded in the mid cap sector, in the industrials      
segment.                                                                        

For further information, please contact:                                        

Matti Vikkula                                                                   
Chief Executive Officer                                                         
Ruukki Group Plc                                                                
Telephone +358 45 6700 606                                                      
www.ruukkigroup.fi                                                              

This stock exchange release is based on translation into English of a document  
written in Finnish. In case there would be any potential discrepancies, 
inconsistencies or inaccuracies, the Finnish version of the release shall       
prevail.