Höganäs AB : North American Höganäs Inc. acquires Kobe Steel's North American steel powder business

Market Wire, July, 2008

Höganäs AB has reached agreement through its subsidiary North American Höganäs Inc. to take over the business of Kobelco Metal Powder of America, Inc ("KOMPA"), a subsidiary of Kobe Steel, Ltd. The agreement was signed on July 9 in Pennsylvania, USA.

The agreement calls for KOMPA, located in Seymour Indiana, to shift production and marketing of its steel powder to North American Höganäs over a brief period as customers transition to material made by the subsidiary of the Swedish group. During this period, KOMPA will produce steel powder products under consignment from North American Höganäs. KOMPA expects to cease powder production in spring 2009 upon completion of transitioning its customers' requirements to North American Höganäs.

To support the smooth transition to North American Höganäs, Kobe Steel and North American Höganäs will form a new company called KHTech Inc. This joint venture company will provide technical services and sales support primarily to KOMPA's Japanese customers in the United States as well as to its other current U.S. customers. KHTech shall be owned two-thirds by North American Höganäs and one-third by KOMPA.

Commenting on the agreement, Mr. Alrik Danielson, CEO of Höganäs AB said "We are very pleased that Kobe Steel has chosen Höganäs as their partner in North America and the agreement is an important step forward. The creation of KHTech Inc. will add impetus to the development of new applications for powder metal technology."

Enquiries:

HÖGANÄS AB (publ)
Alrik Danielson                                       Sven Lindskog
President & Chief Executive Officer          Chief Financial Officer
Tel +46 42 33 80 00                                Tel +46 42 33 80
00

Höganäs AB (publ)
Corporate Communications

Höganäs, Sweden, 10 July 2008

This is information that Höganäs AB (publ) may be obligated to make public according to the Swedish Securities Exchange and Clearing Operations Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 08.00 on 10 July, 2008.

Höganäs was founded in 1797 and is today a leader within the iron and metal powder industry. End products are mainly used by the automotive industry and home appliances, lawn and garden and hand-tools. In 2007 the turnover was MSEK 5 838 (5 123) and income before tax MSEK 562 (525). Höganäs is listed on the OMX Nordic Exchange Stockholm's Mid Cap list.

For further information please visit our website www.hoganas.com

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