Orion's Wholesale and Distribution Division to reduce about 50 employees in Finnish distribution operations

Stock Exchange Releases

20.06.2006 10:00

After the personnel negotiations procedure, a decision has been made in Oriola
Oy of the Wholesale and Distribution Division of the Orion Group to centralise
the deliveries of pharmaceuticals and healthcare products as well as the main
part of services into Espoo and Oulu and to shut down the regional sites in
Seinäjoki and Kuopio. As part of the measures to improve operational
efficiency, the personnel involved in the distribution operations in Finland
will be reduced by about 50, as initially estimated. The persons becoming
redundant in Seinäjoki and Kuopio will be offered relocation opportunities to
the new jobs created at the Espoo site. 
Personnel negotiations concerning the Finnish pharmaceutical distribution
operations of Oriola Oy and relating to the restructuring arrangements
introduced in April in the Wholesale and Distribution Division of the Orion
Group have been completed. The measures are a continuum to already implemented
arrangements for improving productivity and capacity utilisation. In the
demerger of the present Orion Group, the Wholesale and Distribution Division
will constitute the Oriola-KD Group, the parent company of which will be listed
as Oriola-KD Corporation on the Helsinki Stock Exchange at the beginning of
July 2006. 

The starting point in the personnel negotiations was to reduce the number of
regional wholesale centers of Oriola in Finland by shutting down the sites in
Kuopio and Seinäjoki and by centralising the deliveries of pharmaceuticals and
healthcare products as well as the main part of services into Espoo and Oulu.
The consequent need to reduce personnel in Seinäjoki and Kuopio was estimated
to be about 90, the measures concerning all personnel groups. 

The negotiation procedure has resulted in redundancies of altogether 82 persons
in the Kuopio and Seinäjoki sites of Oriola. The operations in Seinäjoki will
be closed as of about 13 September and those in Kuopio as of about 27 September
2006. When centralising operations into Espoo and Oulu, a second work shift
will be introduced in Oriola's warehouses in Espoo as of 4 September 2006. The
working time arrangements will result in longer open-hours for daily order
intake whereby customer service is improved. 

The centralisation of the Finnish distribution operations will lead to the
creation of about 30 new jobs in Espoo, against previously estimated 40
persons. The employees becoming redundant in Seinäjoki and Kuopio will be
prioritised to these opportunities. The total net reduction of about 50 persons
in the Finnish distribution operations is in line with the initial estimation.
As part of the efficiency measures, the premises in Kuopio and Seinäjoki will
put up for sale during the third quarter of 2006. 

Kronans Droghandel AB (KD), which operates in Sweden, has already centralised
its distribution operations as a measure to adjust the cost structure, and
additional actions are being taken. Negotiations concerning a further
downsizing by about 20 employees are estimated to be completed in the course of
June 2006. 

The aim of the efficiency measures in Finland and Sweden is to achieve annual
cost savings of about EUR 5 million, with full impact as of 2007. The
arrangements are estimated to cause about EUR 3 million in one-off items in
2006. 

The total personnel in the Wholesale and Distribution Division is about 1,530
of which 1,100 are working in Oriola and 430 in KD. Altogether about 400
employees of Oriola are engaged in the logistic operations in Finland, the
regional sites in Seinäjoki and Kuopio employing about 45 persons each. 



Orion Corporation


Jukka Viinanen Olli Huotari
President and CEO General Counsel



Contact persons:

Kimmo Virtanen, CFO, Wholesale and Distribution Division of the Orion Group
Tel. +358 10 429 2069, gsm +358 50 429 2069

Eero Hautaniemi, President, Wholesale and Distribution Division of the Orion
Group 
phone +358 10 429 2109, gsm +358 50 429 2109



Distribution:
Helsinki Exchanges
Media

Publisher:
Orion Corporation
Corporate Administration
Orionintie 1A, 02200 Espoo
Homepage: www.orion.fi