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PRESS RELEASE Hydra/Specma Skjern, Denmark, Tuesday, 23 August 2016

Hydra/Specma acquires industrial company Etola China to strengthen Asia platform Hydra/Specma is taking over the Chinese industrial company Etola China from Finland’s Etola Group, a move that will give Hydra-Specma a stronger and more complete product platform in Asia that includes in-house tube and hose manufacturing. Jutland-based Hydra-Grene, a member of the Danish industrial conglomerate Schouw & Co., has trebled in size over the past 12 months. At the start of 2016, Hydra-Grene acquired the Swedish hydraulics company Specma, and the successful hydraulics company is now in a new transaction that will take its annual revenue to roughly DKK 1.8 billion. Effective 1 September 2016, Hydra-Specma will be taking over Etola China, an industrial company and a supplier of lubrication, cooling and filter systems for industrial gears and mining equipment, and tubes and hoses for water, hydraulic oil and gear oil cooling. The company was founded in 2005 and is currently owned by the Finnish industrial group Etola Group. “We’re very pleased to have struck a deal with the Etola Group to take over their subsidiary in China. We have worked with Etola China for several years and have a good relationship with the company’s owners, management and many staff members. Strategically, the company is a fine match with the rest of our organisation, and the deal supports our ambition of having full-scale production in China,” said Hydra-Specma’s CEO Erik Lodberg. “We've made a good deal that will see us taking over inventories and production facilities at the market value. At the same time, we’ll be getting a substantial customer database and a local presence that will be a highly valuable asset for us.” For technical reasons, Hydra/Specma will take over Etola China in two steps, acquiring a 90% shareholding this year and the remaining 10% at a later date. However, Etola China will be rolled into Hydra/Specma’s Chinese operations already this year, raising the company’s Chinese revenue by DKK 60 million and adding 60 employees. Hydra/Specma will now have two factory sites in China, both strategically well located: one in Tianjin near Beijing, where several of the world’s leading wind turbine manufacturers have factory locations, and one in the Shanghai area whose main business is hydraulics systems for marine cranes and trucks. “Having a presence in those markets around the world where our customers have located their operations is essential for us, and our strategy is to follow our largest OEM customers when they move to new markets. That especially goes for the wind turbine industry, which is where we generate much of our revenue. That’s why Tianjin is a perfect location, close to several of the leading wind turbine manufacturers,” said Mr Lodberg. He adds that OEM manufacturers in both the wind turbine industry and other fields are increasingly looking for consolidated suppliers and close business partnerships. In other words, Hydra/Specma's Chinese operations are strongly positioned as a system supplier of tube and hose kits and lubrication, cooling and filter systems for wind turbine manufacturers and heavy industry.

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Earlier this year, Hydra/Specma won the Danish Export Association’s prestigious Exporter of the Year Award in recognition of its success in international markets. Going forward, China will be Hydra/Specma’s largest export market – third only to the Danish and Swedish home markets – and generate revenue of about DKK 170 million with its 120 employees. The customer base is mainly European companies, but also includes a number of local Chinese firms. Hydra/Specma is the Nordic leader in industrial hydraulics and a global leader in hydraulics solutions for the wind industry. The company will generate 2016 revenue of about DKK 1.7 billion and employs 1,000 people worldwide. Hydra/Specma carries more than 40,000 hydraulic components, from fittings and tubes to valves, pumps and motors, and has a presence not only in Europe, but also in the Americas and Asia.

For further information, please contact:

Erik Lodberg, CEO, Hydra-Specma, mobile +45 4031 8800

Jens Bjerg Sørensen, President, Schouw & Co., tel. +45 8611 2222