Change in the Rautaruukki Group's business model

Rautaruukki Oyj Stock Exchange Release 30 July 2003 at 9 am

On 29 July 2003 Rautaruukki's Board of Directors approved a change in the
Group's business model and a new organisation in accordance with it, both
of which will become effective as from 1 September 2003.

The objective of the customer-oriented business model is from before to
clarify and enhance interaction between customers and the Group and to
create the basis for new growth and a higher level of profitability.

Growth in the years ahead will be based on selected and integrated value-
added solutions for customer industries. We call these Future Solutions.
The Group's products and services will be rounded out with products and
services provided by the Group's network of partners. This will enable
Rautaruukki to offer its customers combined, customised and more
extensive product and service packages - Future Solutions. Instead of
capital-intensive high-volume production, growth will be geared towards
business that is based on skills and know-how and delivers a higher
degree of added value for customers.

The customer sectors are construction, the engineering industry,
including shipbuilding, and the metal fabrication industry. Distribution
of metal products will be stepped up and growth will be sought through
the sale of new materials.

A single unified Group

The Group's operations will be divided into four divisions with customer
accountability and a production division. The customer divisions are
Metal Products, Building and Construction Solutions, Mechanical
Engineering Solutions and Metal Fabrication Solutions. The three last-
mentioned divisions in particular, which at present account for about a
third of consolidated turnover, are expected to grow strongly in the
years ahead. Each division will be responsible for developing product and
service applications, product processing, technical support for customers
and sales and marketing.

The Group's steel and rolling production will be organised into a single
cost-effective unit, which will be responsible for production, the
development of production and products as well as raw material and energy
supply.

The business model casts logistics in the role of a function supporting
the divisions.

The business model is built around the Group's strengths: a strong
position within the customers in the Nordic and the Baltic markets, in-
depth materials know-how, efficient production and flexible logistics.

A major aim is to improve profitability by lowering fixed costs.
Accordingly, the structures of the sales and distribution organisations
in particular will be streamlined, and overlapping within administration
will be pared down.

The objective for production activities is high cost-effectiveness and
continual improvements in it. The effects of fluctuations in demand will
be alleviated through better control of capacity and by lowering fixed
production costs.

The names of the Group companies will be unified by going over to the use
of a single name within all operational business units.

Further development Rautaruukki's strategy and Group structure will be
based on the chosen customer segments, ranges of solutions arising from
customers' needs, and on the market area emphasis.


Rautaruukki Oyj


Esko Lukkari
VP, Corporate Communications


ADDITIONAL INFORMATION
Sakari Tamminen, Deputy to the President
tel. +358 9 4177 6275


DISTRIBUTION
Helsinki Exchanges
Principal Media
www.rautaruukki.com