Millog and Finnish Army Signed Partnership Agreement on Army Material Maintenance

Released on Thursday, June 19, 2008

Millog Oy and the Finnish Army have today signed a partnership agreement concerning the transfer of the army material maintenance to Millog Oy at the beginning of 2009.

The basic value of the eight-year strategic partnership contract is EUR 484 million. The costs of the Army material maintenance are currently approximately EUR 100 million per year.

"The strategic partnership model has been thoroughly surveyed for several years. The new way of operations gives both parties the opportunity to focus on their core competences. Millog develops the maintenance functions to meet future challenges. Our main asset will be the competent personnel transferred from the Army", states Mr Aarne Nieminen, President of Millog Oy.

The partnership agreement covers the Army material life-cycle support and Depot-level repair capability for the platforms and systems related to non armoured and armoured vehicles, electronic, missile and weapon systems as well as modifications and installations to all equipment. Additionally Millog will operate as Defence Force's neutral expert organisation in material procurements. Millog will use the Defence Forces' information systems for warehouse and maintenance work

The maintenance organisations of Materiel Command, including Electronics Centre, Vehicle Depot and Depots in Kuopio, Lievestuore and Tervola will be transferred to Millog in the beginning of the year 2009. The repair shops of the troops will continue their operations as part of the Finnish Defence Forces. The strategic partnership model will lead to the transfer of approximately 520 people to Millog with their current terms of employment. Additionally approximately 100 people will work under Millog's supervision, mainly those who will be retired by year 2013.

Millog Oy will be a major player in the Finnish defence industry. Company's annual net sales will be approximately EUR 70 million. Millog utilises the special competences of its divisions and forms competence centres mainly to support the life cycle management of the Finnish Defence Force's material but also to seek actively new customers. By year 2016 Millog is expected to raise 1/4 of its net sales from other customers.