Review of market conditions at the beginning of 2010

CTS Engtec Managing Director Antti Lukka

The tentative improvement of market conditions that began at the end of 2009 has continued into 2010. The measures we have implemented in recent years - such as the development of new service concepts and operations models and integration of operations have supported CTS' profitability in the beginning of 2010.

Customers have regained their confidence and investment activities are once again being restarted. The level of demand for our services has clearly improved. However, the demand for planning, project management and consulting services varies a great deal depending on the line of business and market area.

Of the BRIC countries, the investment markets in China remain strong while the markets in India and Russia are on the rise after a short break, However, indicators for Brazil are not yet showing clear signs of recovery.

Domestic investments recover more slowly than the rest of the company's most important markets.

Industry-specific review

Due to the economic recession, the decline in the demand for printing paper on developed markets has increased. As a result of the decline in the demand for newspapers and magazines, paper industry investments on the developed markets will remain at a low level permanently. Returning to the investment figures of the mid 21^st century is no longer an option.

In the developing countries, the investment situation in the paper and pulp industry is reverting back to normal.

In terms of the domestic forest industry, small renewal investments have got off the ground after last year's stagnation.

Investments related to climate change and the adequacy of resources (energy, water, raw material) have continued their brisk growth everywhere throughout and beyond the recession. Projects founded on biobased technology, such as CHP plants, biobased renewable-energy and fuel pants, and projects related to the environmental technology sector represent a growing segment among CTS Engtech's offerings.

Metal and extractive industry has recovered in 2010. Calls for offers from mining companies continued to grow in numbers. Investments in the field are hampered by the lack of domestic financial markets for mining projects.

The new project to be publicised at the PulPaper Exhibition on the 2nd of June 2010 is an exciting step forward by domestic as well as international standards in terms of the progress of developing renewable energy sources.