KAUKOMARKKINAT 1998

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3

The Kaukomarkkinat Group 4

President’s Review 5

Financial Trends, 1994 - 1998 6

Kaukomarkkinat Group Organization 7

Efficient Global Organization 8

Kauko on Growing Markets 10

Leading International Brands – adidas 12

Citizen – Number One in the Watch Market 14

Panasonic – Human Electronics 16

Panasonic – the Professional’s Choice 18

Leading Quality in Optics 20

Tähti Optikko – For your eyes only 22

Leipurien Tukku – a Food Industry Expert 24

Leipurien Tukku – a Leading Supplier of Bakery Machinery 26

Addresses 27

CONTENTS

Kaukomarkkinat OyP.O.Box 40, Kutojantie 4, FIN-02631 Espoo, Finland

Phone +358 9 5211 Fax +358 9 521 6641e-mail: name.familyname@kaukomarkkinat.fi

Kaukomarkkinat Oy´s head office is in Espoo, near Helsinki.Established in 1947, Kaukomarkkinat is a leading Finnish

trading house and an expert in the global market. We specialize in international trade, imports,

exports and wholesale business.

The Group in Brief 1996 1997 1998

Total sales, FIM million 4,159.6 3,151.4 2,225.2

Net sales, FIM million 3,664.6 2,648.6 1,643.1

65.8 73.3 67.2

Balance sheet total, FIM million 1,266.2 806.4 796.7

Solvency ratio,% 27.0 46.3 49.5

Personnel at year-end 734 721 813

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1000

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2500

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3500

0

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Net sales, FIM million Profit before extraordinary items,FIM million

1996 1997 1998 1996 1997 1998

THE KAUKOMARKKINAT GROUP

Supervisory Board 1998

Chairman: Matti Honkala.Kalervo Haapaniemi.Jouko Tuunainen.Matti Halmesmäki.Juhani Järvi.

Kaukomarkkinat Oy

Total Sales

4

International trade

Domestic trade

Exports

13 %290

66%1,479

21 %456

Net sales Profit

Breakdown of total sales,% and FIM million 3,665

1,643

65.8

73.3

67.2

President, CEO

Kari Ansio.

Management Board

Kari Ansio, PresidentHannu Närhi, Senior Executive Vice President Jari-Pekka Lehmuskoski, Senior Vice PresidentJussi Neuvo, Senior Vice PresidentSakari Laine, Senior Vice President, Logistics and FinanceMarkku Keinonen, Senior Vice President, Legal AffairsJuha Koskenseppä, Senior Vice President, Personnel

2,649

Profit before extraordinary items, FIM million

The Kaukomarkkinat Group’sbusiness in the domestic marketcontinued to make good progress asrising consumer spending powerexpanded the overall demand inpractically all fields of business. On theother hand, conditions for internationaltrade and exports were seriouslydisrupted by the economic crisis inRussia and the recession in Asia.A substantial downturn in the Group’stotal sales and net sales was due tothe ending of an export contract forthe project-type export of Panasonicproducts to Russia in April 1997 whenthe manufacturer turned over thistrade, which had grown into a sizeablebusiness, to a subsidiary of its own.However, the Group’s comparable netsales grew by 7%, which must beseen as satisfactory in view of theproblems that beset Russian trade inparticular.In domestic business, the leadinginternational branded productsrepresented by the Group - adidas,Citizen and Panasonic - madeexcellent progress. Its overwhelminglyleading position on the Finnish marketwas strengthened by adidas withgrowth of no less than 24% in sales, afigure three times the overall growth inthis sector. Sales of Panasonicconsumer electronic products wereup by 19%, double the growth of theirsector. Sales of Panasonic audio-video equipment for professionals andvarious surveillance camera systemsgrew by 24%, which is a clearindication of growing confidence inPanasonic products and quality on thepart of professional users.In the field of watches,Kaukomarkkinat represents Citizenwatches in both Finland and Sweden.In Finland Citizen has been the marketleader by a clear margin for more thantwo decades. This leadership wasstrengthened further, as Citizen’s 9%growth in sales in Finland was fourtimes the growth in the sector. Thetrend in sales for Citizen in Swedenwas also good.The biggest efforts invested in thefuture were in the Optics field, wherethe building of the company’s ownretail chain - called Tähti Optikko (StarOptician) - was begun. The chainconsists of both Kaukomarkkinat-owned shops and outlets owned bybusiness partners. By the end of theyear the chain comprised some 100outlets, of which 30 were owned byKaukomarkkinat. The chain aims to

5

PRESIDENT’S REVIEW

basic condition for operationalefficiency as well as for the continuityof mutual trust and cooperation.Another major field of endeavour isthe constant improvement ofcustomer satisfaction. Customersatisfaction is measured at regularintervals, especially in the main fieldsof business in Finland, andoperations are improved on the basisof the feedback received. A thirdmajor field of development isemployee satisfaction, as onlysatisfied and motivated personnelcan attain high customer satisfaction. Our net profit from operations wasFIM 67 million, which is the second-best result in the history of theGroup. This achievement has to beconsidered good in view of thedifficult economic environments inthe Group’s international trade andthe large outlay in the Tähti Optikkochain.I would like to express my sincerethanks to our customers and ourprincipals for the excellent andconstructive work we have donetogether in the past year. My thanksare also due to all our personnel fortheir extremely motivated, hard andself-sacrificing work and goodresults, in the achievement of whicheach person’s efforts have played animportant part.

win a 30% share of the retail marketwithin five years.The Leipurien Tukku Division hasestablished its position as animportant part of the KaukomarkkinatGroup’s business operations. LT-Tukku Oy’s deliveries of ingredientsand semimanufactures to bakeriesand also to institutional and cateringkitchens have made particularly goodprogress. Operations have beenexpanded into the economic zones ofthe Baltic states and St Petersburg,which are seen as havingconsiderable growth potential in futureyears for trade in machinery andequipment as well.Of the Group’s internationaloperations, the best success wasachieved by the Polish subsidiary,which mostly concentrates ontechnical trading. Its total sales wereover FIM 200 million. Trade with Chinagrew by 44% in spite of the Asianrecession. Trade with Russia andtransit business failed to reach theirtargets, although some business unitsdid well in view of the prevailingconditions.Worthy of mention among theGroup’s other international tradingactivities is the German subsidiary’sexcellent performance in tradingspecialized machinery.The Group’s strategic planning wasupgraded and integrated increasinglywith principals’ planning. The intentionis for the units to comply closely intheir operations with their principals’strategies, which in an increasinglyinternationalized environment is a

Kari AnsioPresident and CEO

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Total sales, FIM million 3,022.0 3,902.7 4,159.6 3,151.4 2,225.2

Net sales, FIM million 1,987.9 3,033.9 3,664.6 2,648.6 1,643.1

Profit before extraordinary items, FIM million 15.8 58.3 65.8 73.3 67.2

Balance sheet total, FIM million 958.7 1,485.4 1,266.2 806.4 796.7

Liquid assets, FIM million 43.5 65.3 12.9 21.2 19.6

Gross margin, % 14.0 11.2 9.7 14.0 24.0

Operating profit before depreciation, % 2.3 2.6 2.4 3.8 6.0

Quick ratio 0.44 0.26 0.46 0.98 0.91

Current ratio 1.33 1.16 1.50 2.01 2.32

Solvency ratio, % 31.7 20.1 27.0 46.3 49.5

Return on investment, % 6.3 13.2 12.6 12.9 13.3

Return on equity, % 5.6 20.9 17.2 16.4 12.2

Investments, FIM million 17.5 24.8 22.2 24.7 34.7

Personnel at year-end 716 743 734 721 813

KAUKOMARKKINAT GROUP 1994 – 1998

Formulas for Key Indicators

Financial trends 1994 1995 1996 1997 1998

Quick ratio = Financial assetsCurrent liabilities

Current ratio = Financial assets + inventoriesCurrent liabilities

Solvency ratio % = Shareholders’ equity + minority interestBalance sheet total

Return on = Profit before extraordinary items + interest expenses + other financial expensesinvestment % Balance sheet total - non-interest-bearing debts (average for year)

Return = Profit before extraordinary items - taxeson equity % Shareholders’ equity + minority interest (average for year)

x 100

x 100

x 100

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KAUKOMARKKINAT GROUP ORGANIZATION

Corporate Administration Business Divisions

Kari Ansio, President, CEO

Sakari Laine, Senior Vice President

● Logistics● Accounting● Finance● Information

management● Internal auditing

Juha Koskenseppä, Senior VicePresident

● Personnel● Corporate services● Insurance● Real estate

Markku Keinonen, Senior VicePresident

● Contracts● Legal affairs● Corporate

Secretary

Kauko Branded GoodsHannu Närhi, Senior Executive VicePresident● Virsu Oy● Optics● Watches● Kauko Time ABLeipurien TukkuHannu Närhi, SeniorExecutive VicePresident

● LT-Tukku Oy● LT-Kone Oy● Leitok Oy

Panasonic DivisionJari-PekkaLehmuskoski, Senior Vice President

● Consumer electronics

● Professional electronics

● Industrial electronics● Photo

Kauko East-West TradeJussi Neuvo, Senior VicePresident

● East-West trade● Transit● Oil products● Trade with China● Kauko-Metex● Lubricants

In Kauko East-West Trade we feel wehave succeeded, when both thecustomer and the principal aresatisfied with the transaction and theservice we provide.

Presence on the Market

Prevailing economic crisis in Russia isa threat but also a possibility for us.Keeping in mind traditions and long-term business relations we adapt tothe changes in the operationalenvironment, the customers and themarket.

Our key to success is a continuouspresence on the market combinedwith versatile commercial andtechnical know-how. Direct contactwith the principals as well as with theend-users is a necessity.

Our representative offices inMoscow, St. Petersburg, Ufa andPetroskoi as well as our network ofsales agents elsewhere in the CISarea are primarily responsible for thedevelopment of our marketing andsales.

We are altogether forty professionals,all fluent in Russian, working foreastern trade.

Export

We deliver technical components andsystems mainly to various industriesin Russia.

Our product assortment includeconstruction materials, machines andequipment for the forestry, woodprocessing and glass industries,maintenance systems for the oil, gas,chemical as well as for the pulp andpaper industries.

Sales of furniture, consumables,electronics and leisureware are alsoan essential part of our activities inRussia and other CIS-countries.

Import of Raw Material

We import from Russia and the Balticcountries wood for pulp processing,timber for sawmills and logs forplywood producers. We are tradingpulp from Russia to paper mills inFinland and to third countries.

From Russia and other CIS -countries we provide plastic raw

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A MASTER IN EASTERN TRADE

Tank Storage in Hamina

Transit traffic of oil and liquid chemicalproducts from Russia and other CIScountries via Finland is normallyrequiring temporary storage in Finland. The services of our TransitTank Farm in Hamina offer a safe,reliable and logistic solution.

Our service package includetransportation arrangements, loadingand unloading, intermediate storingas well as other logistical services.

Our terminal, containing 26 tanks withtotal a volume of almost 100 000 m3,is located in the deepwater port ofHamina, only some 40 kilometresfrom the Russian border.

The treatment of various types of oil-and chemical products has beentaken into account when designingthe terminal.

We are continuously working toimprove the flexibility of our terminaloperations in order to better serve ourcustomers.

Currently we are building up anoperational system, which will consistof quality -, environmental -, safety -and health systems according to ISOand BS standards.

materials and chemicals for theFinnish industry as well as to othercountries.

Furthermore we can offer counter-purchase services.

Oil Products

Rapid price fluctuations arecharacteristic for the oil business. Weare supplying petrochemicaladditives, semi finished as well asend products to Finland and thirdcountries.

International Trade

We trade between Russia and thirdcountries.

To facilitate the trade we also arrangefinancing and counter-purchaseobligations.

Industrial Lubrication andMaintenance

We deliver high quality andenvironmentally friendly lubricants forindustrial and transportation needs.Our total service includes training,technical consulting as well asanalysis and measurement services.

Prevention of EnvironmentalDamages

A both efficient and economicaldischarge of oil and chemicals inliquid form is an environmentalproblem that our clients recognise.

As a solution we can provide multiplepurpose biodegradable absorbents.The import and marketing of theseproducts started in 1998.

Our customers are the industry, shipowners and rescue centres.

Trade with China

Kaukomarkkinat have close to fiftyyears experience in trade with China.Today’s China is facing major socialas well as economical changescreating new challenges for us. Wehave diversified our sources ofsupply and increased the number offoreign principals.

Our local expertise is derived from theemployees in our Beijing, Shanghaiand Guangzhou offices, 24 experts,specialised in various export andimport activities.

Our export to China consists ofmachinery and equipment formechanical and chemical woodprocessing and for environmentalprotection, equipment for healthcare,industrial filters, complete productionlines for the stone and constructionindustries, chemicals and othersupplies for the pulp and paperindustries as well as profiles and otherspecial steel materials for shipbuildingand related industries.

From China we import, in addition togarments, leather goods, footwearand electronics.

Countries in South-east and SouthAsia, like Vietnam, Bangladesh andIndia are also included in our regularsupply territories.

Metex is Focusing on Central-Eastern Europe

Metex is a well known importer andmarketing outlet for mainly technicalproducts in Poland, Hungary,Germany and the Czech Republic.Our company is also represented inBulgaria and Romania.

In Poland Metex is established andwell known as a representative andas an importer of technical products.We represent world leadingmanufacturers of machines andequipment for the mechanical andchemical wood industry and forproducers of chemicals.

On the rapidly expanding Polishmarket we have succeeded in sellingcables, electrical apparatus, airfieldlightning and safety systems as wellas raw materials for the glass,ceramic and copper smeltingindustries.

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KAUKO ON GROWING MARKETS

apples to Western Europe and theNordic countries.

Our import of foodstuff to Poland isgrowing. Cocoa based raw-materialsand semi-finished products as well ascrushed exotic fruits and juiceconcentrates are on our list ofimports.

Africa

Our representation in Zimbabwe isinvolved in projects for energymanagement and for the mechanicalwood processing industry. We alsodo business in industrial chemicals,raw materials and additives.

New import activities

We are developing the import of rawmaterials and semifinished productsfor our industrial customers inFinland.

Environmental technology is one ofthe most important fields in futurebusiness in Poland. In this field wesupply sand- and oil separators,wastewater aerators, pipes, pumpsand processes.

Our daughter company in Germanyoperates world wide. They specialisein reconditioning and turn-keysupply of roll grinding machines. Thedelivery program also comprisescomplete surface treatment lines forflat steel products.

In Hungary we concentrate onsupplying machinery and centres forcutting and processing sheet metal.We also sell products for theelectrical- and forestry industries andpowder paints for the metal workingindustry.

We are developing our activities in theCzech Republic. We are taking ourposition as an importer andrepresentative of technical goods andequipment on various industrialsectors.

In the Balkan countries we marketequipment and machinery mainly forthe chemical and wood processingindustries.

Food trade

Metex activities in Poland includeexports of frozen berries andgroceries, juice concentrates and

New Feet You Wear-barefoot technology

An excellent example of adidasproduct development is the Feet YouWear shoes, which follow thenatural contours of the foot and giveexcellent feel for the playing andrunning surfaces, thus enhancingbalance and boosting performance.

A nationwide network of dealers

As an importer, we have paid specialattention to ensuring that there is anextensive network of retailers of ournumber one brand in sporting goods - adidas - throughout Finland. As thedistributors of adidas products, wehave selected maximum coveragethrough specialist sporting goodsshops, department stores,hypermarkets’ sporting goodssections and mail-order companies.These are points of sale wherediscerning consumers in search ofinternational branded goods canconveniently find famous adidasproducts.

In the import trade, Kaukomarkkinatspecializes in the import andmarketing in Finland of leadinginternational branded goods. Thebranded products we represent arethe best in their field, products of thehighest quality, in which consumerscan place their trust when selectingsporting and leisure goods, watchesand home electronics as well asoptical and photographic products.Our best-known branded goods areadidas, Citizen, Panasonic, Polaroid,Rodenstock, Silhouette, Technics andYashica.Through our long-term, systematicwork, we have created a solidfoundation for our cooperation withinternational producers of brandedproducts. An important link thatcomplements this cooperation is ourdealer network in Finland. They arethe leaders in their respective fields,as are the branded goodsKaukomarkkinat represents. Absolutetrust and long-term cooperation withthe different parties involved in thetrade are the foundation upon whichwe build our operations. We shallcontinue to do so in the future.

adidas - three famous stripes

On the sporting goods market, adidasand its symbol - the three stripes - area concept. The importing andmarketing of adidas products ishandled by our subsidiary Virsu Oy,which specializes in the sportinggoods trade.The adidas pioneering tradition in thesporting goods field goes back to the1920s, when the German shoemakerAdi Dassler made his first trainingshoes, thus actually creating theentire sports goods trade. This wasthe beginning of the adidas successstory as the world’s best-knownbrand of sporting goods.The adidas brand was registered in1948 and the three stripes wereadopted as the symbol the followingyear. This means the 50-yearmilestone has already been passed.Today adidas and its three stripes area combination that is known,recognized and respectedeverywhere people are involved insports, exercise, competitions orgeneral fitness.

Top names go with adidas

Since the days of Olympic goldmedallists Jesse Owens (Berlin 1936)

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LEADING INTERNATIONAL BRANDED GOODS

and Emil Zatopek (Helsinki 1952), thesporting elite have placed their trust inadidas. So have the top athletes of today, among them HaileGebrselassie, who broke the worldrecord for the 5000 metres in Helsinkiin 1998. The Soccer World Cup in France last year was a triumph for adidas. The gold medallist team, France, played in adidas textile and adidas shoes. The official ball for the championships was also adidas. This was the culmination of the hard work that adidas has done for soccer.The success achieved by adidas isbased in large measure on its guidingprinciple of offering those who keep fitfor their own satisfaction the samequality equipment as top athleteshave opted for. Lifestyle and fashionare also significant parts of the adidasphilosophy. But when all is said anddone, the important thing is toproduce, for all sports lovers - fromthe fitness enthusiast to the mostdemanding competitive athlete - thesame uncompromisingly developedand crafted sports equipment.

International fashion and style inwatches

When choosing a Citizen, the Finnishconsumer can be sure that his or herwatch is the best, not only in qualitybut also in elegance. A watch is animportant and highly visible part of theway a person dresses. Citizen’scomprehensive range has somethingfor every taste, a timepiece that willcomplement each individual’spersonal style.

The world’s most sophisticatedwatch technology

Citizen is at the forefront of productdevelopment. An example of this is the Citizen Eco-Drive range ofwatches. Eco-Drive watches arepowered by a photocell which charges up an environmentally friendlytitanium-lithium-ion battery. When fullycharged, the battery can power thewatch for up to 2 - 6 months.The Citizen Aqualand range is thebroadest selection of diver’s watcheson the market. The features of theHyper Aqualand watch record dataon the dive that can be laterdownloaded direct into a PC anddisplayed on-screen or printed out.The Citizen group also includes theAdec range of watches, whosecompetitiveness comes from itsaffordable prices and its Citizen-backed quality.

Kaukomarkkinat Oy is one of Finland’sleading importers and marketers ofwatches and clocks. Our mainrepresentation is Citizen, the world’sleading manufacturer of watches.

Over 30 years of cooperation inFinland

We have handled the Citizen watchdistributorship in Finland withsuccess since 1966. During theseyears, Finns have bought more thanthree million Citizen watches.

The first in Europe to achievemarket leadership

Thanks to our effective marketingwork, Finland was the first country inall of Europe in which Citizenachieved market leadership. Thisbreakthrough took place in the mid-1970s. Citizen is the market leader forwatches in Finland by a clear margin.This is proved by consumer surveysshowing that today 37 per cent of allFinns have Citizen watches on theirwrists.

Responsibility for the Swedishmarket too

Our company’s exceptional successin marketing Citizen on the Finnishmarket has not gone unnoticed inJapan. Cooperation with ourJapanese principal is close and fruitfuland we are continually enhancing it.The esteem and trust are mutual.Citizen has put Kaukomarkkinat incharge of marketing its watches inSweden too, where we have handledthe marketing of Citizen watchesthrough our own subsidiary since1981.

Striking a karate blowin watch marketing

Citizen’s breakthrough on the Finnishmarket began with an attention-getting and original campaignfeaturing a karate blow - with aCitizen watch on the wrist. Thislegendary success story started witha TV advertisement that people stillremember. Riding on the popularity ofthis campaign, the Japanese watchbrand won Finnish hearts thanks toits reliability and strength.

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CITIZEN - NUMBER ONE IN THE WATCH MARKET

A wide network of dealersguarantees success

The Citizen success story in Finlandwould not have been possible withouta high-class network of dealers. All around Finland there are authorizedCitizen dealers who serve consumerswith professional skills, dependablymeeting all watch requirements.In addition to watches, our Watchand Clock Department’s wide andattractive range includes variousalarm, table and wall clocks.

A satisfied customer also afterthe sale

The servicing and spare parts servicefor watches and clocks is handled bya centralized facility at our HeadOffice in Espoo. The trained expertswho work there are responsible forseeing to it that the watches andclocks brought in for servicing arehandled in a flexible and professionalmanner. All Citizen watches arecovered by a two-year guarantee. Ouraim in every situation is to do things ina way that guarantees continuingcustomer satisfaction after the watchis bought.

Our Japanese principal MatsushitaElectric Industrial Co. Ltd. is theworld’s leading manufacturer ofconsumer electronics. Its productrange includes televisions, videoequipment, stereos, personal stereos,in-car entertainment systems,microwave ovens, batteries, shavers,musical instruments, computers,monitors, CD-ROM drives, GSMmobile telephones, cameras, copiers,fax machines, other telephone relatedproducts and telephone answeringmachines. Kaukomarkkinat has along-standing and solid businessrelationship with Matsushita, for whomwe have distributed the Panasonicand Technics trademarks in Finlandfor more than 25 years.

Looking to the future

The number of staff Matsushitadedicates to research anddevelopment tells you somethingabout its commitment to the future:some 27,000 engineers and scientistswork exclusively on developing newtechnologies and equipment to aidpeople everywhere in the world. Thecompany devotes some USD 6 billiona year to R&D. Matsushita holdssome 46,000 patents. The name ofMatsushita is also on a large numberof patents for digital technology.

Customer satisfaction throughlasting cooperation

The partners we have chosen are thecountry’s leading distributors, whorely on the Matsushita products wedeal in. The names of Panasonic andTechnics are found nationwide in theretail outlets of the Expert and MustaPörssi chains as well as in othershops. We have a strong field salesorganization and we continually investin training our dealers and supportingthe marketing effort. We constantlyaim to enhance our cooperation withour distributors. Up-to-date,interesting information on ourproducts can also be found on thePanasonic web site athttp://www.haku.net/panasonic.PlayE Shop Panasonic chain now hasseven retail outlets in the followingtowns: Helsinki, Turku, Tampere,Jyväskylä, Salo, Lahti and Seinäjoki

Visual products are test winners

Matsushita was the first to produceover 200 million television sets. The

Quintrix picture tube of the widePanasonic range of TVs makes themcharacteristically unbeatable for theirsharp picture and natural colours,superb audio reproduction andconvenient remote control features. New display technology is representedby the Panasonic T (tau) concept.Examples of this include television setswith a totally straight-edge picturetube, flat-screen plasma screens andbackground projection TV. In its home video equipmentPanasonic is a trailblazer in ease ofuse. Programming is made easy withShowView and PDC codes. PanasonicTVs and videos have come out on topin tests both in Finland and abroad.

Creative fun with a video camera

The new DV (digital video) camerascombine convenience for consumerswith professional-quality picture andsound characteristics. The PanasonicDV camera range is the widest on themarket, with the right model foreveryone. A number of conventionalcamcorders are also included in therange.

Fun and enjoyment for musiclovers

Panasonic in-car equipment, portableradio-cassette players and personalstereos mean CD-quality musicreproduction anywhere you go. WithTechnics hi-fi equipment you can builda concert hall or a home theatre.Technics musical instruments andpianos are for everyone from thebeginner to the professional musician.

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PANASONIC - HUMAN ELECTRONICS

Hot and cold at an affordable price

Panasonic is also the world’s leadingmanufacturer of air-conditioningequipment. A hot new product is theair heat pump, which can save up to50% in heating costs. In the heat ofsummer the same appliance keepsthe indoor air cool and fresh.

Healthy and easy cooking

In our White Line product group,Panasonic offers the widest availablerange of easy-to-use automatic andgrill microwave ovens.

Lightweight cleaning power

Panasonic vacuum cleaners are lightand efficient. They have won praiseespecially for their up to sevenfoldfiltering of the exhaust air, which cutsdown the dust content of indoor airby 99.9%.

Panasonic batteries - for toughapplications

In addition to having the world’swidest range of batteries, Panasonic’snew, environmentally friendly alkalinebatteries yield the power needed forthe digital equipment of tomorrow -today. Panasonic battery is a doubletest winner.

Leading office automation andtelecommunication technology

Our range is comprehensive. Itincludes GSM mobile phones,cordless phones, telephone systems,fax machines, photocopiers, copyingwhiteboards, printers, monitors, DVD-RAM drives and other computerperipherals as well as laptopcomputers.The range of GSM phones has theright choice for everyone fromordinary consumers to discerningbusiness users. ISDN telephonesystems are suitable for wired phonenetworks, and the KX-T900 range ofcordless phones with CT-1 and DECTversions has held market leadershipfor years.Reachability is a keyword in customerservice. Panasonic’s cordless DECTphones, which are an integral part ofthe telephone system, improvemobility in-house and nearby. Also,Panasonic’s voice mail takesmessages and provides service 24hours a day.The elite of fax machines isrepresented by PC/LAN compatible network faxes and compact personal multifunction units.Our range of computer peripheralsfrom Panasonic, the world’s leadingmonitor manufacturer, includes notonly traditional cathode-ray tubemonitors and new flat-screenmonitors but also monochrome andcolour printers as well as printer-based multifunction devices. Otherdata products include laptopcomputers and portable CD-ROMdrives, rewritable DVD-RAM drivesand checkout systems.

The range of copying productsembraces both analogue and digitalcopiers with versatile qualities thatflexibly adapt to meet the needs ofwidely differing companies.Networked digital copiers facilitatecopying and printout convenientlyfrom your own workstation. Thecopying products also includecopying whiteboards forconvenience at meetings.

Professional video equipment forhigh-standard programmeproduction

Panasonic is one of the world’sbrands for professional audio andvideo equipment. We supply the latest

in high-tech applications for high-standard TV programme productionand presentations. The DVCPROformat developed by Panasonic hasbeen chosen by the world’s leadingTV companies as well as the FinnishBroadcasting Company and ChannelFour Finland.The International Olympic Committeehas also selected it as the productionformat for the year 2000 Olympics inSydney. Our product range coverscamcorders and desktop tapeplayers, portable editors and portabletape players as well as AVworkstations that combine the worldsof computer and video.In the near future DVCPRO users willbe able to use the new ISDN andATM data communications networksto transmit their visual material fromthe filming site for processing andrecording regardless of distance.

The market leaders forsurveillance TV systems

For years Panasonic has been theclear market leader in surveillancevideo systems in Finland. Our range iscomprehensive. We supply completesystem packages both for areasurveillance and for industrial processcontrol. We also have packagedsolutions for shops, offices andhomes.

The Super Dynamic cameras developed by Panasonic now permitsurveillance in tough backlit situationsthat previously could not be filmed.Compact PC and printed cardcameras can be used for specializedapplications in industry and medicalscience. Panasonic’s time-lapse VTRsfor security applications are the mostextensive range on the market.

Electronics for industrialcustomers

Our deliveries to Finnish industrialcustomers include Matsushitaelectronics products, components,batteries, production automationmachinery, and measuringinstruments as well as measuring andtesting systems.

Servicing guarantees customersatisfaction

Our Panasonic Service Centre hascentralized responsibility for the after-sales marketing of professional andhome electronics equipment as wellas for the delivery of spare parts andsupplies.

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PANASONIC - THE PROFESSIONAL’S CHOICE

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LEADING QUALITY IN OPTICS

Focus on better vision

Optical business unit, based in theVaristo district of Vantaa, servesFinnish opticians as a full-servicewholesale supplier and lensmanufacturer.

Our range embraces all eye opticsproducts and the supply consists ofunchallenged top products andbrand names.

Main product groups are frames,lenses, contact lens products,binoculars, sunglasses and sighttesting equipment.

Focus on quality

The Titan range of lightweight frames,developed specially for Finns, haswon an established position asFinland’s leading titanium range.

Silhouette of Austria, a maker ofquality frames which is celebrating its35th anniversary this year, alsomakes the top-quality DanielSwarovski Crystal Eyewear framesthat we import as well as sportyadidas frames and sunglasses.

Focus on the sun

Polaroid is the leading brand forsunglasses in Finland. Polaroidsunglasses and clip-ons have amultiple-layer structure thateliminates 100% of the glare and UVradiation, providing peak protectionfor the eyes. Polaroids are highlydurable, making them a safe choiceeven for the smaller members of thefamily.

A new feature in Polaroid lenses isthat they are now available in singlevision and multifocal progressive lenstypes to correct myopia andhyperopia.

Focus on contact lenses

We offer contact lens users lensesand related products based on thetop expertise in the field.

Focus on nature

Swarovski binoculars and telescopeshave won unreserved popularityamong birdwatchers and natureenthusiasts worldwide for theirincomparable quality and durability.

Supreme quality in lenstechnology

A large number of Finns who wearspectacles use lenses made by ouroptical facility in Varisto. Theprofessional staff who work there areskilled in every stage of lensproduction.

Our main principal is Rodenstock ofGermany, one of the world’s leadingmanufacturers of eyewear.

A wide range of equipment

Rodenstock sight testing equipmentand WECO edging machinery coverall the equipment that opticians need.

Finland’s neighbouring areas

In Estonia we produce both plasticand glass lenses for local opticians.Sales of Polaroid sunglasses havealso started up in Estonia.

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TÄHTI OPTIKKO - FOR YOUR EYES ONLY

Chain reaction

The entrepreneurship based TähtiOptikko (Star Optician) chain thatKaukomarkkinat started up in autumn1998 is a nationwide, totallyintegrated optical business venturethat combines the strengths of retailand wholesale.

At the end of its start-up year, thechain already had more than ahundred retail outlets, of which about70 were franchisees and 30 wereowned by Kaukomarkkinat. Thetarget of 60 outlets announced inMay 1998 was thus overachieved bya clear margin.

The goal is to be one of Finland’s toptwo optician chains in the next fiveyears, with a 30% market share.

Customers and shops close toeach other

The Tähti Optikko chain’s outlets arelocated as close as possible to majorflows of people - in shopping centres,built-up areas and city centres, tomake it as simple and easy aspossible to shop there.

Tähti Optikko provides a full set ofoptical services on a customer-centred basis, quickly and withquality, ensuring a personal and totalsolution to all questions about humanvision.

Tähti Optikko outlets have adistinctive look from outside; theinterior design also provides aunique, warm and inviting ambiencethat is spreading as new outlets areadded to the chain.

The business concept supports themarketing message of the chain andthe visual appearance meets thecustomers’ expectations.

Strong brand products

The Tähti Optikko chain’s productrange is based on quality, safety, andproducts that have alreadyestablished themselves in themarketplace - Titan lightweightframes, Silhouette, adidas,Rodenstock, Polaroid and others.

The chain also has exclusive retailrights in Finland on the Mario Conti,Jean Paul Gaultier, JPG and YohjiYamamoto brands.The highly competitive range is broadand represents the latest trends inbrand products.

Even minus is a plus

The Tähti Optikko chain is part ofFinland’s biggest customer loyaltysystem, which has a coverage of50.2% of Finnish households -meaning more than 1.1 millionfamilies.

Membership of the Plussa system isa part of the chain’s customer-relations marketing; the Plussa cardacts as a channel of interactionbetween the chain and the customer,strengthening customer loyalty.

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Leipurien Tukku has served Finland’sbakers for 79 years. In this time it hasachieved dominance as a supplier ofingredients, machinery andequipment. Operations have beenexpanded into the rest of the foodindustry and institutional kitchens.

LT-Tukku Oy - the bakery trade’sspecialized wholesaler

The product range of LT-Tukkuincludes all the ingredients andpackaging supplies bakers need,as well as frozen food products. TheFinnish and imported ingredients soldunder the Leipurin (Baker’s) trademarkguarantee the customer high quality ata competitive price. We are the agentsin Finland for leading manufacturers inthe field:Anglia Oils Limited, Aromatic AB,Martin Braun KG, Carma AG, Cerestar Scandinavia A/S, Dragbaek Margarinefabrik A/S,Frucaps, Grands Moulins de Paris,Ireks GmbH, Norlander Food AB,Odense A/S, Sonneveld B.V., Taura Natural Foods N.V.

LT-Tukku has a nationwide salesorganization. The field sales network issupported by an efficient telesalesoperation. Fast and regular deliveriescreate the basis for successfulcooperation between the baker andLT-Tukku.In addition to a wide range of qualityproducts, we also offer our customersa useful array of peripheral services.Our customer-centred productdevelopment service, our courseswhich have won wide acclaim, andthe trips we arrange for study andtrade fairs help bakeries to enhancetheir skills and product ranges for theirown customers. Our own productconsultants and those of ourprincipals bring in the latestinformation on what’s happeninground the world, providing services ofhigh standard for our clients. Our pilotbakery in Espoo is a guarantee of ourhigh-quality and efficient services fortoday and the years ahead.Our membership of Bako Europa, thecommunity of leading Europeanbakery suppliers, offers usopportunities for mutual trading aswell as an international interchange ofinformation on questions concerningtrade in ingredients. The members ofBako Europa also take part inpromoting sales of bakery products

through a regular exchange ofexperience and information on thetrends in baking in each country.

Supplier of choice to theprocessed food and meat industry

In a short time, LT-Tukku Oy’s meatand processed food industry unit has become a major supplier ofingredients, additives and rawmaterials for the Finnish food industry.In partnership with our leading Finnishand foreign principals and the otherdepartments at LT-Tukku, we are ableto provide our customers with acomplete range of high-qualityproducts.In addition to our highly competitiveproducts, our comprehensive servicesalso include technology consultancy,customer training and customer-centred product developmentcooperation.We are the Finnish agents for thefollowing international specialists:Arteva Specialities, Cerestar Scandinavia A/S, BK Giulini Chemie GmbH, Elliot Packaging Industries, Griffith Laboratories B.V., Hellasnet M & A Karatzis S.A.,Imwiedex B.V., Oskuda GmbH, Lactovit GmbH, Loders Croklaan B.V., Carl J. Nielsen & Son A/S, Krehalon Synclair Packaging B.V.,vanHesse B.V., Raadvad A/S, Tochcello/Japan, Volk Enterprises Inc.

Kauko-Gourmet - quality, savourytreats from around the world

Kauko-Gourmet’s range of productsConsists of wines, meat products,and egg-based products Kauko Gourmet imports wines and acts as agents for many of the products in the range sold by Alko, the Finnish alcohol monopoly. We engage in restaurant wholesale from our own wine cellar. Imports mainly focus on traditional countries for wine such as Italy, France, Spain and Bulgaria, but we also have principals in Chile and South Africa.Our meat products are aimed atconsumption by restaurants andcatering, and they are used asingredients by industrial operators. We

buy our meat products from well-known and dependablemanufacturers around the world.Our principals are Affco New Zealand,Synavi S.A., Les Charmilles andTillmanns-Hof. Our range embraceslamb and beef, poultry and game aswell as exotic alternatives such as themeat of crocodile, antelope andbuffalo.

Leipurien Tukku in the Balticstates and St Petersburg

We are an important supplier of goodsto the Estonian bakery and foodindustry and to restaurants. Weprovide a comprehensive range ofproducts, efficient logistics, andtraining & product presentationservices. OOO Leipurien Tukku has operated inSt Petersburg since October 1997. Inspite of Russia’s economic problemswe have established a stable positionas a supplier to the bakery industry inthe region.

Leipurien Tukkus subsidiary started inLatvia in January 1999. We expect toattain a significant position as asupplier to the bakery industry andother sections of the food industry inLatvia as we have elsewhere.

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LEIPURIEN TUKKU - A FOOD INDUSTRY EXPERT

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LT-Kone OyLT-Kone Oy supplies the bakery andfood-processing industry withmachinery, equipment and productionlines that are manufactured either byits own Group companies or elseimported. We manufacture bakerymachinery and equipment at theHausjärvi factory in Hikiä. We areFinland’s leading supplier ofmachinery and equipment to thebakery industry and we are a majorsupplier of equipment to otherbranches of the food processingindustry.

Wide range of products

Our product range includes all themachinery and equipment needed bysmall, medium-sized and industrial-scale bakeries - from flour silos topacking machines. We also offerfittings for minibakeries as well as awide and constantly growing range ofbaking supplies. Our principals areamong the world’s leadingmanufacturers in their fields:Hobart Corporation,BV Machinefabrik Houdijk,Klöckner Hänsel Tevopharm B.V.,Lillnord A/S,Mondomix Howden B.V., Rheon Automatic Machinery Co Ltd,Sancassiano S.p.A.,Seewer AG,Sveba-Dahlen AB, Werner & Pfleiderer GmbH.

Customized in-housemanufacturing

LT-Kone Oy’s Hausjärvi plant designsand manufactures high-quality specialmachinery and production automationequipment for the bakery andpreprocessed food industry. Designwork and product development arecarried out in close cooperation withcustomers. There are many patentedsolutions. LT-Kone’s growth strategyis based on expanding its market areaand on exports in its own specialareas of expertise. Examples of thisare the development of industrialbread production lines, loadingequipment and proufing chambers.

Supplementary products

The delivery programme of LT-KoneOy also includes pizza ovens andsmall appliances such as foodprocessors, mixers, vegetable

choppers and cutters.We also have Finland’s broadestrange of bakery accessories forprofessional use. We maintain aconstant watch on the developmentsin the field and our highly reliableEuropean principals supply newproducts quickly to the Finnishmarket.

Smooth service

Our reputation as a reliable supplier isalso based on our after-sales service.LT-Kone Oy’s strengths are its expertinstallation, commissioning andservicing personnel as well as its fastspare parts deliveries.We keep more than 3,000 spare partitems in stock, and in conjunction withour principals we provide regulartraining for our service organizationthroughout the country.

LT-Kone in the Baltic states

We have expanded operations intothe Baltic states. Tallinn-basedLeipurien Tukku A/S in Estonia has acomprehensive range of bakingequipment in its sales programmewith which to supply the growingmarkets of the Baltic area.

Leitok OyEveryday fashion for theconsumer

Leitok Oy operates worldwide bycommissioning and marketing fashionclothing to meet the needs of Finnishconsumers. Our brand collectionsAvera, Donna Moda and Doni Italiaare examples of our strong input inproduct design, by which we updateour product ranges. Our extensive,long-lasting relations with ourprincipals, especially in SoutheastAsia, help us to maintain competitivepricing for the main basic products,consistent quality and goodmanagement of the entire logisticalchain.

In addition to clothing, we also sellhandicraft yarns. We have apartnership contract with HelsinginVillakehräämö Oy, on the basis ofwhich we sell well-known brandedgoods to our customers. The yarnsNalle and 7 Veljestä are the marketleaders in Finland by a clear margin.

A LEADING SUPPLIER OF BAKERY MACHINERY

HEAD OFFICE

Kaukomarkkinat OyP.O.Box 40, Kutojantie 4FIN-02631 EspooPhone +358 9 5211Fax +358 9 521 6641Telex 124469 kauko fiCable kauko helsinkiInternetwww.kaukomarkkinat.fi

Leipurien Tukku LT-Kone OyLT-Tukku Oy P.O.Box 127, Kutojantie 4FIN-02631 EspooPhone +358 9 521 70Fax +358 9 521 2121Telex 124469 kauko fi

Leitok OyP.O.Box 62, Kutojakulma 2FIN-02631 EspooPhone +358 9 521 77Fax +358 9 521 2120

Metex CorporationP.O.Box 47, Kutojantie 4FIN-02631 EspooPhone +358 9 521 789Fax +358 9 521 6615Telex 124521 metex fi

OTHER DOMESTICOFFICES

Kaukomarkkinat OyOptical BranchP.O.Box 102, Martinkyläntie 54FIN-01721 VantaaPhone +358 9 852 991Fax +358 9 854 3053

Kaukomarkkinat OyTransit Tank FarmP.O.Box 19, Öljysatamantie 7FIN-49461 HaminaPhone +358 5 230 3330Fax +358 5 230 3360

LT-Kone OyHausjärvi FactoryItätie 6FIN-12240 HikiäPhone +358 19 768 451Fax +358 19 768 006

Virsu OyP.O.Box 32, Orapihlajatie 33FIN-00321 HelsinkiPhone +358 9 521 333Fax +358 9 521 3380

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ADDRESSES

BulgariaMETEX Representative OfficeSimeonovsko Shose 571126 SofiaPhone +359 2 962 5242

962 5347Phone/Fax +359 2 962 5348

+359 88 504 900

P.R. ChinaKAUKOMARKKINAT OYRepresentative OfficeRoom 750, 7th floorHong Kong Macau CentreDongsi Shitiao LijiaoqiaoBeijing 100027Phone +86 10 6501 4273

6501 42936501 2288

Fax +86 10 6501 4275

KAUKOMARKKINAT OYRepresentative OfficeRoom 2411, 24th Floor, South TowerGuangzhou World Trade CentreNo. 371-375 Huanshi Dong RoadGuangzhou 510095Phone +86 20 8778 0918Fax +86 20 8778 7708

KAUKOMARKKINAT OYRepresentative OfficeRoom 504, West TowerSun Plaza88 Xian Xia RoadShanghai 200335Phone +86 21 6270 0640/1/2Fax +86 21 6270 0872

Czech RepublicMETEX CZ Vinohradská 89/90130 00 Prague 3Phone +420 2 7173 2181

+420 603 460 649 Fax +420 2 6731 1126

EstoniaFOCUS EESTI ASPunane tn. 61EEOO36 TallinnPhone +372 6 324 335Fax +372 6 321 735

LEIPURIEN TUKKU ASBetooni 6EEOO14 TallinnPhone +372 6 201 485/6Fax +372 6 201 487

GermanyMETEX (Deutschland) GmbHAn der Bahn 304613 LuckaPhone +49 34492 31412

+49 172 901 3726 Fax +49 34492 31420

METEX (Deutschland) GmbHBüro DresdenBertolt-Brecht-Allee 2401309 DresdenPhone +49 351 3199 3240

+49 172 717 2815 Fax +49 351 3199 3241

Hungary METEX HUNGARIA KFT.Pozsonyi út 501133 Budapest Phone +36 1 349 1185

239 2010/1Fax +36 1 239 2012

LatviaLEIPURIEN TUKKU LATVIASC World Trade Center RigaOffice no. 227Elizabetes Str. 2LV-1340 RigaPhone +371 732 1153Fax +371 732 5146

PolandKAUKO-METEX LTD HUBER TECHNOLOGIES LTDMETEX FOOD LTDKasprzaka 18/2001-211 WarsawPhone +48 22 632 2200Fax +48 22 632 8044

RumaniaMETEX Representative Officec/o S.C. Decagon S.A.Str. Rosia Montana No. 2Block 17, SC2, App. 41Bucharest - Sector 6Phone +40 1 772 6957Fax +40 1 430 1090

RussiaKAUKOMARKKINAT OYRepresentative OfficeKursovoj pereulok 9, kv 2119034 Moscow Phone +7 095 564 8402/05Fax +7 095 564 8447

KAUKOMARKKINAT OYRepresentative OfficeTorzhkovskaya 5, off 503197342 St. Petersburg Phone +7 812 324 4018Fax +7 812 325 2634

LEIPURIEN TUKKU LRS OOOTorzhkovskaya 5197342 St. PetersburgPhone/fax +7 812 327 4378

KAUKOMARKKINAT OYRepresentative OfficeUl. Andropova, 2/24185035 PetrozavodskKareliaPhone +7 814 277 5988 Phone/fax +7 814 277 4964

KAUKOMARKKINAT OYRepresentative OfficeUl. K. Marksa 67, kv. 74450015 UfaP.O.Box 8, 450078 UfaBashkiriaPhone +7 347 902 8295Fax/Phone +7 347 2 503 382

KAUKOMARKKINAT OY/XENA LTD.Ul. Krasnaja 1, off 434614039 PermPhone/Fax +7 3422 306 944

122 860

SwedenKAUKO TIME ABSmidesvägen 10-12, SolnaBox 1385S-171 27 SolnaPhone +46 8 280 300Fax +46 8 627 0093

ZimbabweMs. Yrsa LindholmP.O.Box A1080 Avondale, HararePhone +263 4 752 931

+263 4 750 498 Fax +263 4 757 744

Finland Own sales offices and subsidiaries abroad

F.G. Lönnberg ISO 9002 1999

P.O.Box 40, Kutojantie 4FIN-02631 Espoo, Finland

Internet www.kaukomarkkinat.fiFax +358 9 521 6641Phone +358 9 5211