HK RUOKATALO AND ATRIA TO ESTABLISH TURKEY MEAT JOINT-VENTURE
HK Ruokatalo Group Oyj STOCK EXCHANGE BULLETIN 29 June 2006, at 3pm
HK RUOKATALO AND ATRIA TO ESTABLISH TURKEY MEAT JOINT-VENTURE In January 2006, Finlands largest turkey meat processing companies HK Ruokatalo and Atria announced they had embarked on a feasibility study to work together to safeguard turkey production in Finland. Based on the study, they have decided to establish a joint venture, Länsi-Kalkkuna Oy, owned on a 50-50 basis, to produce turkey meat. The employees working in the turkey business of each owner will transfer to the employ of the new company. The companies are working together on this front in a bid to safeguard turkey farming and turkey meat processing in Finland and to provide competitive Finnish turkey products for consumers. It is planned the turkey meat production company will be operative from the start of 2007. This arrangement applies solely to the start of the production chain: Länsi-Kalkkuna Oy will be responsible for primary production, slaughtering and cutting. HK Ruokatalo and Atria will continue to compete with their own brands in the production, R&D and marketing of turkey products as they have to date. Atria sells its turkey products under the Atria brand and HK Ruokatalo under the Kariniemen brand. HK Ruokatalo and Atria expect the joint-venture to improve the poor profitability currently experienced in the turkey business. The sector is suffering from industrial overcapacity exacerbated by growing imports. The joint-venture will reduce capacity and enable more effective use of the remaining capacity. Rationalisation is expected to have an impact of around EUR 2 million. Länsi-Kalkkuna Oys turkey hatching business will be centred on Atrias hatchery in Jalasjärvi, whereas slaughtering and cutting will take place at HK Ruokatalos turkey slaughterhouse in Säkylä. The new company will also assume responsibility for importing and supplying turkey breeds in Finland. A total of some 14 million kg of turkey meat was slaughtered in Finland in 2005. Atria has a 38.0% share of the fresh turkey market and HK Ruokatalo an 18.5% share (Source: A.C. Nielsen 1-4/2006). Imports accounted for 10% of consumption at the start of the year (Source: TNS Gallup 6/2006). Further information is available from: Reijo Kiskola, executive vice president, Poultry Business, HK Ruokatalo Oy, tel: +358 (0)10 570 5201 and +358 (0)40 559 7310. HK Ruokatalo Group Oyj Kai Seikku CEO DISTRIBUTION: Helsinki Exchanges Internet: www.hk-ruokatalo.fi