HKSCAN TO RATIONALIZE OPERATIONS IN SWEDEN
HKScan Oyj STOCK EXCHANGE RELEASE, 31 May 2007 at 11am
HKSCAN TO RATIONALIZE OPERATIONS IN SWEDEN
Scan AB, responsible for the HKScan Group's business operations in Sweden, is
launching an efficiency programme estimated to deliver annual savings in the
region of EUR 18-22 million upon completion. Underlying this two-year programme
is to improve competition strengths and the unsatisfactory financial performance
of Scan AB.
The planned efficiency programme comprises competitiveness-boosting investments
to modernise production techniques and work practices at plants. The investments
concern several industrial locations. In a further bid to enhance efficiency,
Scan's business will be reorganised into two profit centres: Meat Business and
Processed Meat and Convenience Food Business. The marketing and sales
organisation will be overhauled to better meet today's demands on the
interaction with the customer base.
Implementation of the efficiency measures included in the programme calls for
investments of roughly EUR 20 million in the years 2007-2009. The company will
also take write-downs of approximately EUR 10-15 million.
Along with the two-year efficiency programme the future need for labour is
reducing in several industrial plants. The programme will affect in all an
estimated 400 jobs, corresponding to ca. 12 percent of current Scan personnel.
The majority of the cuts will concern production employees. Accurate measures
will be specified as they become actual while the programme is advancing.
Personnel representatives have been informed on the planned programme and its
realization.
The savings now sought are expected to be realised in full starting from Q3 in
2009.
The efficiency programme is a continuation of the centralisation of production
currently underway at Scan and initiated by Swedish Meats in summer 2006.
Centralisation measures have involved the closure of the Skurup processing plant
in autumn 2006 and the shutdown of the Visby cutting plant as well as operations
in Helsingborg and Malmö in early 2007. Operations in Kävlinge will be
discontinued in the third quarter of 2008.
Besides the programme, Scan is also starting work on a national distribution
centre in Linköping together with an outside partner. The centre will enhance
efficiency and flexibility in logistics while also allowing further progress to
be made in customer service and delivery reliability. Construction will begin in
June 2007 and the distribution centre should come on line in 2010.
HKSCAN OYJ
Kai Seikku
CEO
Further information:
CEO Kai Seikku, HKScan Oyj. Please leave any messages for him to call with Katja
Backman on +358 10 570 2428
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