From the President and CEO

President and CEO Jari Latvanen in the Q1/2018 Interim Report:

Our first quarter result was still burdened by the challenges related to the Rauma poultry unit ramp-up process in Finland. However, the negative impact clearly decreased from the previous quarter. During the first quarter, our main target was to improve our poultry delivery capability towards customers, and in this we succeeded well. However, the measures taken to secure the customer deliveries caused additional costs and eroded the result. Moreover, the seasonal effect that is typical for the first quarter was visible.

During the second quarter of the year 2018, our aim is to consolidate the Finnish poultry volumes fully to Rauma. In the second half of the year, full attention will be given to improving our efficiency and financial performance related to the Rauma plant. In the long run, our Rauma unit will substantially improve our efficiency and competitiveness, contributing to our strategy implementation.

We have taken several firm actions in order to correct the negative result trend. The group-wide programme for operational efficiency improvement is advancing as planned in parallel in several production units. Additionally, we are implementing cost-saving actions at all home markets.
At the same time, consumer confidence has strengthened both at our home and export markets.

Moreover, the meat market continues to grow. In line with our From Farm to Fork strategy, we aim to capitalise this growth trend at the maximum by serving our customers and consumers with innovative and sustainably produced products.

Our efforts are supported by the export agreement signed last year between the Chinese and Finnish food authorities. We commenced the pork exports during the first half of this year, on 23 April 2018, as planned. In February 2018, we also signed an agreement to establish a joint venture in China. We will establish a footprint on the Chinese market with premium category, value-added products.

Our performance is not yet acceptable, and we are in an early phase of our strategic transformation and turnaround process. We continue implementing our From Farm to Fork strategy, which we today find highly relevant not only for HKScan but for the entire meat industry. We are committed to improving our competitiveness and profitability and to adding value to all players along the entire food chain on a sustainable long-term basis.