Metso extends Valmet-Xi'an jv, increases ownership to 75 per cent

Published Apr 1, 2008 17.00.00 +2 GMT

Metso has concluded an agreement to increase its ownership in the Chinese joint venture company Valmet-Xi'an Paper Machinery Co. Ltd. from 48.3 per cent to 75 per cent 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-Xi'an 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 EUR 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.

Metso is a global engineering and technology corporation with 2007 net sales of approximately EUR 6 billion. Its almost 27,000 employees in approximately 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries. www.metso.com

For further information, please contact: Harri Nikunen, Senior Vice President, Finance, Metso Paper, tel. +358 40 828 9083