releases
Eastern European Markets
PRESS RELEASE
June 13, 2005

Two new K-rauta stores in Riga, Latvia

Two new K-rauta stores - K-rauta Lucavsala and K-rauta Ulmana – have opened in Riga, Latvia. The stores have been designed with a particular emphasis on providing a comfortable and easy shopping experience, and fast shopping in a separate drive-through builders' yard. The selections of these stores highlight living-related product lines. The K-rauta network in Latvia will be intensively developed in the next couple of years.

Electric and heating appliances and bathroom equipment are displayed as total solutions in prominent locations in the stores. The selections of gardening and interior decoration items are comprehensive. New product lines in which to specialise are being actively sought. The stores have been designed with a particular emphasis on providing a comfortable and easy shopping experience, and fast shopping in a separate drive-through builders' yard.

The K-rauta Lucavsala at Lucavsalas iela 3 has a selling area of 14,000 m2 and the area of the K-rauta Ulmana at Ulmana gatve is 15,000 m2. The stores are open Monday through Saturday between 9.00-21.00 and on Sundays between 9.00-17.00. The new K-rauta stores employ a total of 170 persons.

K-rauta is the concept with which Rautakesko expands outside Finland. In Latvia, in addition to the newest K-rauta stores, there is a K-rauta partnershop located in Kuldiga. Rautakesko expands the store network with two or three units every year and develops the K-rauta partnershop network further. In the near future, the objective is to have a network of some 30 stores in Latvia. Rautakesko's strategy is to reach market leadership in the Nordic and the Baltic countries. In addition to Finland, Rautakesko holds the market leadership position in the hardware and builders' supplies trade in Estonia and Lithuania.

In 2004, Rautakesko's net sales totalled EUR 1,150 million, 36% of which came from outside Finland. Rautakesko operates a chain of 40 K-rauta stores and a chain of 105 Rautia stores, and a nationwide B-to-B Service. There are currently 14 K-rauta stores in Sweden and 4 in Estonia. In Lithuania, Senukai operates 14 stores of its own plus 77 partnershop stores. Rautakesko is in the process of finalising the acquisition of the St. Petersburg Stroymaster chain in Russia and negotiating about the acquisition of a controlling interest in Norgros AS, the owner of Norwegian's Byggmakker chain of hardware and building materials stores.

For further information
Mikael Forss, Executive Vice President, Rautakesko Ltd
tel. +358 500 909 005

www.kesko.fi


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