INCAP ELECTRONICS AND ABB’S HELSINKI WORKS SIGNED A LETTER OF INTENT ABOUT THE MANUFACTURING OF COMPONENTS FOR SYNCHRONOUS MACHINES

Incap Electronics Ltd., which constitutes the electronics sector of Incap Group, and ABB Industry Oy, which is part of ABB Group, have signed a letter of intent to purchase an operation manufacturing rotor pole cores for synchronous machines.

In accordance with the letter of intent, the Synchronous Machines Division of ABB Industry Oy intends to outsource the manufacturing of rotor pole cores to Incap Electronics. The envisioned corporate acquisition, which is accordant with Incap Electronics’ strategy, will strengthen the position of Incap Electronics as a contract manufacturer for electronics industry and enhance the cooperation between ABB and Incap Electronics. The decision to outsource the manufacturing of rotor pole cores will support the target of the Synchronous Machines Division to shorten lead times and to create an agile manufacturing system in response to the market fluctuations.

Rotor pole cores are essential components of large electrical machines. According to the letter of intent, Incap Electronics will take over the subassembly and component deliveries of ABB Industry and will continue the previously Helsinki-based operation in its newly acquired production unit in Vaasa. The letter of intent concerns a personnel of about ten people working for ABB Industry, who can choose either to continue in the service of ABB or move as old employees to the Helsinki or Vaasa unit of Incap Electronics. The envisioned corporate acquisition will also provide work to the cooperative network of Incap Electronics and course it to expand.

Before the closure of the deal, the annual net turnover of the Vaasa Unit is about 10 million euro. The letter of intent will cause the net turnover of Vaasa Unit to grow by about one third, i.e. to more than 13 million euro. The parties will be negotiating for final consensus about the deal during the spring.

Last year, Incap Electronics had a net turnover of 34.2 million euro, and the company employed 427 people. In December 1999, Incap Electronics purchased the steel sheet component operation of ABB Control Oy’s Low-voltage Systems Division in Vaasa. Incap Electronics currently has three production units, of which the Vuokatti Unit specialises in electronics manufacturing and the Helsinki and Vaasa Units in mechanical manufacturing.

Incap Group is a contract manufacturer of electronics and furniture. The group’s net turnover in 1999 was 70.8 million euro, and it employed a total of 774 persons.

Oulu, 17 Feb. 2000

INCAP CORPORATION

Tero Frey

President