HKScan Corporation                                                         Stock exchange release 4.3.2014, 9:00 am (EET)


HKScan to improve its operational efficiency and competitiveness by restructuring its production set-up in Sweden

As part of its strategic review in Sweden, leading Nordic meat producer HKScan Group will improve its operational efficiency by further streamlining and developing its production structure in Sweden. The planned actions will create a sustainable production platform in Sweden, supporting the Group’s strategic goal of boosting profitable growth.

The restructuring to be initiated in Sweden will centralize and enhance the Group’s Swedish production and technology footprint. The plan targets an annualized profit improvement in excess of EUR 7 million. Scheduled for completion by the beginning of 2015, the restructuring will entail an investment of approximately EUR 0.6 million, and the entire roll-out will incur non-recurring costs of about EUR 10.3 million. Of these non-recurring costs, EUR 6.5 million are asset impairments.  

The plan involves the discontinuation of pig slaughtering and cutting at the Skara facility, where production of meatballs, hamburgers and other convenience foods will continue. In the future, pig slaughtering will be handled by HKScan’s own slaughterhouse located in Kristianstad and by its associated company Siljans Chark, located in Ickholmen. Beef cutting will be moved to the Linköping facility. HKScan’s operations will additionally be supported by a contract slaughtering agreement with Skövde Slakteri. As part of the restructuring, HKScan will relocate the production of skinless sausages from Örebro to Linköping and discontinue its operations in Örebro.

After the restructuring, HKScan’s production will be centralized and integrated at four key locations; in Kristianstad, Linköping, Halmstad and Skara.

"After a thorough strategic review and analysis of all relevant alternatives, we trust that these changes will ensure far better capacity utilization, a competitive cost base and opportunities for profitable growth. HKScan is strongly committed to developing and investing in the Swedish meat business and value chain”, says Göran Holm EVP, Consumer Business Scandinavia.

Negotiations with personnel affected by the forthcoming changes have been concluded. The restructuring plan will involve a personnel reduction of approximately 140 employments in total, mainly at the Örebro and Skara units. The headcount will respectively grow at the Linköping and Kristianstad facility by approximately 50 employees. In line with its personnel policy, the Group aims to offer as many impacted employees as possible new employment opportunities at other HKScan units.  Additionally, new vacancies at the partner company, Skövde Slakteri are being discussed. HKScan currently has approximately 2,460 employees in Sweden.

Strategic review to be finalized - Competitiveness programme to continue in Sweden

The Group is proactively investing in its competitiveness in order to secure the future availability of responsibly produced, high-quality Swedish meat raw material. Last year, HKScan appointed specific producer collaboration teams specializing in pig, beef and lamb production, aiming to further develop and revitalize Swedish primary production. The same cooperation model has already been applied earlier in Finland, and the best production practices are now being transferred to Sweden. The Group is also working to develop and renew its contract models, supplier steering, meat sourcing and producer services.

HKScan is committed to continue investing in its Swedish consumer brands, offering and products with the aim of adding value throughout the entire meat value chain. Recent examples of these efforts include the launch of the Svensk Rapsgris® concept in 2012 and the acquisition of exclusive rights to NG Hampshire genetics to reinforce Scan Piggham Swedish pork. Today the Scan brand is the clear market leader and one of Sweden’s best-known brands. The meat raw material of all Scan products is 100% Swedish in origin. Pärsons is the leading brand in the cold cuts segment. Poultry produced by HKScan and sold in Sweden is also sold and marketed under the Pärsons brand.

HKScan Group

Hannu Kottonen
President and CEO

For further information:
To contact Hannu Kottonen, CEO, HKScan, kindly submit a callback request to Marja-Leena Dahlskog, SVP Communications, HKScan, tel. +358 50 502 0060.

Please also submit inquiries to Göran Holm, EVP,Consumer business in Scandinavia, HKScan, tel.+46 70 657 0034.

HKScan is the leading Nordic meat expert. We produce, market and sell high-quality, responsibly-produced pork, beef, poultry and lamb products, processed meats and convenience foods under strong brand names. Our customers are the retail, food service, industrial and export sectors, and our home markets comprise Finland, Sweden, Denmark, the Baltics and Poland. We export to close to 50 countries. In 2013, HKScan had net sales of EUR 2.5 billion and some 11 000 employees, making us one of the Europe’s leading meat companies.

Nasdaq OMX, Helsinki