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IBM cuts E550m Nordic outsourcing deal
Finnish giant looking to save 35 per cent of IT costs

By Ron Coates

Published: Thursday 12 June 2003

IBM has scooped a E550m, 10-year outsourcing deal to manage and improve paper giant M-Real's infrastructure and applications.

Veli-Matti Myntinnen, M-Real executive vice president and CFO, said in a statement: "By reducing our IT-related costs and releasing capital, we aim to further improve our competitiveness."

He quoted IBM's takeover of PwC Consulting last year as being crucial to the deal for its understanding of the forest products industry.

The Finnish company, Europe's third largest paper merchant, expects to cut IT costs by up to 35 per cent over the term of the contract. It will book a £10m gain based on the deal in filings on the Helsinki stock exchange. Three hundred staff will become IBM employees.

M-Real is the largest European manufacturer of coated paper and has quadrupled its turnover in the last five years. End users of the coated paper and packaging products are printers, publishers and makers of branded products.

IBM will take over M-Real's IT services operation and the operations of its logistics subsidiary, Logisware Oy. Both of these have a presence in several European countries. Current applications include SAP and Mill Execution Systems.