MeadWestvaco And Rafsec Join Forces for RFID Tagging Market Development

Agreement Reduces Early Market Risks For Retailers Adopting Item-Level RFID Systems

STAMFORD, CONN., (September 3, 2003) - MeadWestvaco announced today that it has signed a Memorandum of Understanding (MOU) with Rafsec, Oy, one of the world's largest manufacturers of RFID transponders. The MOU establishes a framework whereby MeadWestvaco Intelligent Systems and Rafsec can collaboratively assess investments for anticipated increases in the market for item-level RFID tags and systems.

MeadWestvaco Intelligent Systems (MWVIS) is a new business group established by MeadWestvaco to create, market and sell practical, turn-key solutions which provide retailers with real-time, in-store, item-level inventory visibility to enhance each store's performance. A key emphasis in the MWVIS approach is the systematic reduction of risk for retailers' adoption of RFID technology. One important element of risk reduction is to ensure tag availability at an appropriate price. MWVIS will work with its customers and with Rafsec to accurately forecast tag demand. Correctly timing their capital investments to ramp up tag production with market needs is of strategic concern to Rafsec, since item-level tagging has the potential to require large volumes of tags.

The agreement ensures MWVIS and its customers ongoing access to high-quality transponders at competitive pricing from a well-established market-leading provider. The deep technical expertise and strong developmental resources within Rafsec, as well as their ability to support all major technology platforms, were key elements in the decision to form this agreement. "Identifying and then taking tangible steps to reduce risks are key to driving adoption in the early stages of the market", according to Ronnie Hise, leader of MWVIS.

MWVIS is working to create prudent partnerships with various component suppliers which are beneficial to all parties, but which also allow those parties flexibility to respond to unforeseen market developments. "Rafsec and MeadWestvaco are not looking to lock each other down with this agreement," according to Hise, "but rather we are creating an agreement to help each other understand supply and demand issues in the near-term. Good information will lead to good business decisions, which then provides our customers with a consistent tag supply at a good price."

Timo Lindström, president of Rafsec, reinforced the need for such cooperative agreements. "This relationship is indicative of what the RFID market needs, major corporations with the necessary resources working in a complementary fashion to meet large end-user and retailer needs."

Another important element of the agreement deals with tagging technology development. MeadWestvaco will benefit from Rafsec's aggressive approach to improving tag technology, and MeadWestvaco will afford Rafsec with early feedback regarding the specific demands of new applications.

About MeadWestvaco Corporation
MeadWestvaco Corporation, headquartered in Stamford, Connecticut, is a leading global producer of packaging, coated and specialty papers, consumer and office products, and specialty chemicals. Among the principal markets it serves are the automotive, beverage, consumer products, healthcare, media and entertainment, and publishing industries. The company operates in 29 countries and serves customers in nearly 100 nations.
   MeadWestvaco Intelligent Systems RFID solution provides application-oriented technology to retailers enabling real-time item-level inventory visibility, designed to improve store performance.

About Rafsec, Oy
Backed by the strength of its parent, the UPM-Kymmene Corporation, Rafsec, headquartered in Tampere, Finland, has the largest capacity in the industry for the integrated production of high quality RFID transponders suitable for numerous end-use applications. Rafsec's flexible production enables the customization of products, as well as fast deliveries in different formats. Rafsec supports all major technology platforms.