KEMIRA'S STRATEGY IMPLEMENTATION ADVANCES - SWEDISH AND FINNISH COMPETITION AUTHORITIES APPROVED DEAL ON ALCRO-BECKERS

The Swedish and Finnish competition authorities have approved the agreement by which the ownership of Alcro-Beckers AB, the Swedish manufacturer of decorative paints, will be transferred to Tikkurila from 1 January 2001. The deal is part of Kemira's new strategy to focus on areas of growth in water treatment, pulp and paper chemicals and paints. As for fertilizers, negotiations will continue into 2001 and alternative ways of divestment from the nitrogen fertilizer business are being considered.

Alcro-Beckers is Sweden's largest manufacturer of decorative paints, and employs a staff of 1,145. Net sales of the business to be acquired are estimated to be approximately EUR 205 million this year. The agreement price will be ultimately defined on the basis of the financial statements for 2000 and will be approx. EUR 200 million.

The largest Alcro-Beckers production facilities are located in Sweden (Stockholm) and Poland (Debica), with operations also in Denmark, Norway, Germany and Finland. Since 1994, Tikkurila and Alcro-Beckers have had a joint venture company called Baltic Color in the Baltic area. The Alcro-Beckers holding (50%) in Baltic Color will be included in the agreement. Rulings by competition authorities in other countries are expected in the near future.

The Group's result for the year will rise as anticipated above that of last year. The outlook is good in Kemira's growth areas, the pulp and paper chemicals, water treatment chemicals and paints. The operating income for fertilizers will exceed earlier estimates and will be clearly positive. The European nitrogen fertiliser market, which stands for slightly over one half of Kemira's fertilizer business, has improved considerably during the past year.

"In this upward-bound situation Kemira has decided to continue negotiations and investigations as to the divestment of the nitrogen fertilizer business into 2001 as part of the announced strategy. The agreement with Alcro-Beckers is the first significant step towards the Group's new growth in our core businesses. Growth will be sought both by way of acquisitions and through organic growth," says Tauno Pihlava, CEO.