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Intention to close tufting and coating operations for artificial grass pitches in Dendermonde

20 June 2012

The Executive Board of Desso Holding BV and Desso Sports Systems NV hereby announces its intention to restructure the Sport Division. This will involve Desso continuing the development, marketing, sales and installation of artificial grass and DESSO GrassMaster pitches and with the extrusion of yarns. However, Desso plans to stop its tufting and coating operations for artificial grass pitches.

This intention is a result of the increasingly fierce price competition in the global artificial grass market. This is a market characterised by constantly rising prices of raw material and a general trend to produce artificial grass pitches on a larger scale at lower costs.

With the volumes of artificial grass pitches produced by Desso, it is no longer proving possible to continue profitable, independent tufting and coating operations. An in-depth analysis has shown that it would be better to have our yarns tufted into fully finished pitches by other suppliers. Desso's added value is mainly in the development of yarns, installation of artificial grass pitches and hybrid grass systems, also known as DESSO GrassMaster pitches. For Desso, the sales & marketing organisation is another very important part, whose successful activities have also contributed to Desso's growing market share in the sector's recent crisis years.

However, despite this growth in market share, the absolute volumes of artificial grass pitches are too low to maintain profitable tufting and coating operations. Consequently, Desso intends to adjust the organisation of the artificial grass production and sales to these new market conditions. As a result, in production as well as in other departments, 79 jobs will be lost among the manual workers and 12 among the office staff. For this reason, we have contacted the Works Council and trade unions today about entering into a consultation phase, in line with the 'Renault Act'1), to find appropriate solutions.

With regard to the selection of suppliers who can tuft and finish these artificial grass pitches according to Desso's specifications, a very careful analysis will be performed. Discussions are currently being conducted with several parties.

1) Compliance with the legal information - and consultation obligations towards the employees (organizations) in the supervision of a proposed collective redundancies to a (partial) closure.

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