Translation: Original comment published in Finnish on 8/1/2023 at 6:42 am EEST.

The change negotiations to be initiated in the Raahe unit will involve all employees of the unit and they can possibly lead to the closure of the unit. This was not surprising, as we have already considered centralizing production at the Pyhäntä plant as a possible way to adapt to the challenging market situation.

Centralizing production is a logical response to the challenging market situation

Lapwall announced on Monday that it had issued a call for change negotiations in the Raahe unit. The negotiations concern all 23 employees in the unit and may lead to the closure of the unit and the dismissal of all workers. The company is therefore considering transferring production from the Raahe unit to its Pyhäntä unit as part of its production efficiency improvements. During the change negotiations, the company will examine the possibility of offering the employees of the Raahe unit jobs in other units.

The news was not surprising, as we have previously considered centralizing production at the Pyhäntä plant as a possible way to adapt to the difficult market situation in the wall element market. As we wrote in our still topical extensive report in June, there is plenty of spare capacity at the Pyhäntä plant. Thus, we believe that the company has good capacity to transfer the long-term Kastelli customer relationship signed in connection with the KW-Component acquisition to the Pyhäntä unit. In addition, we estimate that the additional capacity required to meet normal demand at the Pyhäntä plant is available with reasonable investment. Thus, we consider the centralization of production to be a very logical response to the challenging market situation in the short term, but also a justified move in terms of long-term business efficiency.