Rautakesko and Puukeskus Sign Timber Trade Cooperation Agreement

Rautakesko Ltd and Puukeskus Oy have entered into a cooperation agreement to merge their timber trade purchasing operations. The agreement, set to take effect at the beginning of 2003, will integrate Puukeskus' 27 warehouse outlets into Rautakesko's distribution network.

Under the new arrangement, Puukeskus will handle the purchasing and warehousing services for Rautakesko's timber and wood-based board products. The companies will also jointly develop an electronic order and invoicing system. Rautakesko anticipates the collaboration will enhance the competitiveness of its K-rauta and Rautia chains, as well as its industrial and constructor sales divisions, through more competitive pricing, a wider product selection, and faster deliveries.

The partnership is expected to improve Puukeskus' operational efficiency by increasing its stock turnover rate and purchasing volumes. Rautakesko will continue to focus on developing its chain concepts, product selection, logistics guidance, and sales to industrial and construction clients. Puukeskus' primary roles will be wholesale warehousing and managing purchasing agreements with sawmills and board industries.

Rautakesko Ltd is a subsidiary of Kesko Corporation operating in the hardware and builders' supplies trade across Finland, Sweden, and the Baltic countries. Puukeskus Oy is Finland's largest merchant of wood-based building materials and part of UPM-Kymmene Wood Products. The agreement is subject to approval from competition authorities and currently applies only to Finland.

This consolidation aims to strengthen both companies' market positions within the timber and wood products sector.