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Electronics Production | April 10, 2006

Scanfil shed 120 in Finland

EMS-provider Scanfil cuts down 120 workers at its electronics assembly plant in Oulu, Northern Finland. The plan is to transfer most of the production of the Oulu plant into the Group's other units.
Scanfil has previously reported on the impact of the decrease in the prices and delivery volumes of broadband products on the turnover of the 1st half of the year 2006. During the 1st quarter, volumes of other network products grew but the development of turnover was slowed down by the product and supply structures with lower production costs of new, technically more advanced products.

Due to price competition and the lower production costs of the new products, Scanfil is now updating the previously issued turnover estimate for the 1st half of the year. Based on the available information, the 1st half of the year 2006 turnover is estimated to fall by about 20% compared to the corresponding period last year. The turnover for the 1st quarter is almost EUR 60 million. The turnover for the entire year is estimated to remain below that for 2005, and the operating profit is estimated at approximately 5% due to adjustment and technology transfer costs of the Belgian subsidiary to be entered for the 1st quarter.

In order to retain the Group's price competitiveness, products of the Oulu plant must, in the future, be manufactured in the Scanfil Group's plants with a lower cost level. Scanfil has therefore today called representatives of the Oulu plant personnel into co-operation negotiations regarding the entire personnel of the plant. The plan is to transfer most of the production of the Oulu plant into the Group's other units. The co-operation procedure of the Oulu plant is not expected to cause significant costs.

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