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HK RUOKATALO TO STREAMLINE ITS FINNISH PRODUCTION STRUCTURE

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HK Ruokatalo Group Oyj   STOCK EXCHANGE BULLETIN 10 Jan. 2006, 9.30am


HK RUOKATALO TO STREAMLINE ITS FINNISH PRODUCTION STRUCTURE

HK Ruokatalo is to overhaul its production structures in Finland in
line with a two-year programme. "The planned action is being taken
against a background of unsatisfactory competitiveness," states Kai
Seikku, managing director of HK Ruokatalo Oy.

HK Ruokatalo is studying the feasibility of focusing most of its
processed meat production on the Vantaa facilities and the processing
of fresh meat on the Forssa facilities. It is planned to centre
logistics on Vantaa.

These structural solutions are part of a programme to enhance HK
Ruokatalo’s business at home. Major investments to this end are
currently underway, with replacement of the slaughtering line and
cutting plant at Forssa, construction of a refrigeration plant at
Forssa, as well as expansion of the distribution terminal at Vantaa
now at the deployment stage.

When implemented, the plan, which is scheduled for 2006-2007, will
signal the closure of operations at the Turku processed meat factory,
the Tampere meat processing plant and the Tampere distribution
terminal.

Under the changes envisaged, HK Ruokatatalo will reduce its number of
industrial places of business in Finland from eight to six. It is
expected that by the end of 2007, the efficiency measures planned and
those announced earlier will affect about 500 jobs at present numbers.
HK Ruokatalo currently employs some 2,500 people in Finland.

The actions are expected to deliver annual cost savings in the region
of EUR 15-20 million. If everything goes to plan, the full impact of
these savings on the company’s costs will be in evidence from the
start of 2008.

Following the changes through will require an investment programme of
around EUR 40-45 million to transfer and deploy industrial production.

The schedules and ways to take the plan forward will be expanded on in
talks with staff during the course of spring. Likewise, we will expand
on the impacts of the new structure on employees and the future need
for labour, both on the blue-collar and clerical side. The company is
openly disclosing the entire programme in a bid to facilitate the
start of discussions within the company.

The centralisation plan referred to in this context does not apply to
finance and administration and sales staff in Turku, nor to employees
of LSO Foods Oy in Turku and Tampere. At other places of business,
development will continue as normal in line with changes in the market
situation and cost efficiency needs.


Further information is available from:
Managing director Kai Seikku, HK Ruokatalo Oy, tel: 010 570 3270.
Please leave any messages for him to call with Eva-Stina Engberg, tel:
010 570 6112.


HK Ruokatalo Group Oyj



Simo Palokangas
CEO


DISTRIBUTION:
Helsinki Exchanges
Internet: www.hk-ruokatalo.fi

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