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Eastern European Markets
NEWS RELEASE
August 23, 2005

Valio investing in a customer service centre in Moscow

Valio is set to open a customer service centre in the Moscow area. A new distribution warehouse for refrigerated products, facilities for packing butter and cheese, plant for the production of processed cheese, and offices for the sales organisation will also be built. The customer service centre is expected to be up and running by mid-2007, next to the Moscow–St. Petersburg road northwest of Moscow. It represents an investment of around ¤ 30 million.

Valio has studied different options for developing its operations in Russia, which is the company’s single largest export destination. The chosen strategy is based around production sited primarily in Finland with a local presence in sales and distribution. The need to respond more effectively to the demands of expanding modern retailer chains in Russia makes a local sales and distribution organisation an important factor. The customer service centre provides an opportunity to develop direct sales to retail chains as well as sales through distributors in Russia. Butter and cheese products will be sold in more modern consumer packages. The ZAO Valio St. Petersburg sales organisation will also be expanded with staff numbers rising from 60 to around 90 people.

The Russian retail and foodstuffs markets are undergoing a major transformation and Valio’s decisive action will ensure the company’s involvement, as more and more food sales are transferred from market places to supermarkets and shops following the pattern of the western world.

A new customer service centre for St. Petersburg as well

In St. Petersburg, premises will be leased for a customer service centre running sales and distribution. The possibility of having fresh dairy products made in the St. Petersburg area is being investigated.

Valio runs the leading Finnish food business operation in Russia with sales totalling ¤ 90 million in 2004. Valio butter holds a significant market share in Russia, as does Viola processed cheese, while Oltermanni is another key Valio brand making an impact there.

For further information:
Harry Salonaho
President and CEO, tel. +358 10 381 2001

www.valio.com


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