EURENCO Statement Regarding Vihtavuori Oy Powder Plant

EURENCO, the company that currently owns and operates the Vihtavuori Oy powder plant in Finland issued a press release on March 12, 2013. In the release, EURENCO states that it is starting “to define a downsizing process that may ultimately result in stopping the production of nitrocellulose and propellant in Vihtavuori.” This sounds ominous, but understand that a plant closure in Finland won’t necessarily mean the end of Vihtavuori-brand powder (or at least alternative EURENCO powders with similar characteristics). This is because Eurenco has four (4) other modern powder production facilities. Additionally, we have confirmed that Nammo Lapua is current having “discussions” with EURENCO regarding the status of the Vihtavuori plant — but we have no more specifics about Nammo’s interest in the plant.

EURENCO Press Release about Vihtavuori Oy
In June 2012, EURENCO (France), the mother company of EURENCO Vihtavuori Oy
announced its willingness to divest from its operations in Finland, considering the deteriorated economical situation of the subsidiary and the insufficient prospects of the local defence market.

Since Patria confirmed it is not interested in buying back the Vihtavuori plant, EURENCO is now starting a co-operation negotiation to define a downsizing process that may ultimately result in stopping the production of nitrocellulose and propellant in Vihtavuori.

The detailed planning of the process will be known after negotiations with all relevant unions and with existing customers, since EURENCO has also to enter into discussions with its customers to inform about the situation and to define solutions to mitigate the consequences of this possible downsizing.

During the coming months, EURENCO will also remain open to enter into negotiation with any company interested in acquiring EURENCO Vihtavuori Oy.

Created in January 2004, EURENCO (European Energetics Corporation) is owned by
GROUPE SNPE. EURENCO has annual sales exceeding 200 Million €, more than 1000
employees, 5 modern production plants in Belgium (Clermont), Finland (Vihtavuori), France (Bergerac, Sorgues) and Sweden (Karlskoga), plus one commercial desk in Washington and one distribution company in Houston (USA). EURENCO Vihtavuori Oy has annual sales of 12 MEUR and about 120 employees.